Ethereum's monthly chart displays a "cup and handle" pattern, signaling a potential breakout above $3,700.
A confirmed breakout could trigger a rally toward $6,675, as projected by technical indicators.
Key indicators like MACD and RSI suggest a cooling phase, with $3,600 as a critical support level.
Ethereum (ETH), the second-largest cryptocurrency by market capitalization, is making waves in the technical analysis sphere with a compelling "cup and handle" formation on its monthly chart. This classic bullish pattern, indicative of potential upward momentum, suggests that ETH could be on the verge of a significant price breakout.
Analysts focus on the resistance level around $3,700, which has historically capped Ethereum’s upward movement. A confirmed breakout above this key level could signal a rally targeting $6,675, a projection based on Fibonacci retracement levels and technical indicators.
The cup and handle pattern is a widely recognized technical indicator. It consists of a rounded “cup” formation, representing a consolidation phase, followed by a smaller pullback known as the “handle.” Ethereum’s price action aligns with this pattern, making it a focal point for traders.
Source: X
Currently trading near $3,592, ETH has slightly declined 3% in recent sessions. Nevertheless, the cryptocurrency’s ability to maintain proximity to the resistance level underscores its potential for a bullish breakout.
This pattern reflects market psychology, with the “cup” signifying a period of market consolidation and the “handle” indicating a momentary hesitation before a potential breakout. If Ethereum decisively surpasses the $3,700 resistance, it could confirm the bullish trajectory and drive prices toward the projected target of $6,675.
Recent Price Movements and Trading Activity
Ethereum has displayed a fluctuating intraday trend. After reaching November highs near $3,800, the cryptocurrency experienced a pullback and is now trading around $3,617.
Source: CoinMarketCap
Despite a 0.75% daily decline, Ethereum remains above crucial support levels, maintaining its bullish outlook. Short-term price action reveals a tug-of-war between buyers and sellers, with ETH oscillating within a narrow range. The $3,600 level has emerged as a psychological threshold, with traders eyeing this level for signs of the next directional move.
Indicators like the MACD and the RSI offer additional insights. The MACD histogram shows declining bullish momentum, though the MACD line remains above the signal line, supporting a positive trend.
Source: TradingView
Meanwhile, the RSI, at 64.34, hovers near overbought territory but has recently dipped, suggesting a temporary cooling-off period.
As Ethereum consolidates near critical resistance, traders will monitor upcoming price movements closely. A breakout above $3,700 could solidify the bullish narrative and allow ETH to approach its long-term target of $6,675.
