Ethereum has formed and confirmed an inverse Head & Shoulders pattern, breaking above the $3,900 neckline.
Analysts project a target of $4,500 based on the measured move theory, supported by increased trading volume.
Maintaining support at $3,900 is critical for ETH to sustain its bullish trajectory.
Ethereum (ETH) has become one of the market’s leaders following a powerful breakout from an iH&S pattern on the 4-hour chart. Signs of recovery are encouraging and points to further upward move, a scenario that analysts believe can take the price to $4,500. Buy signals for ETH are now emerging because technical signals correspond with increasing traders and investors’ interest.
The breakout is when the price rise cuts through the ‘neckline’; the horizontal line linking the peak between the low points confirming the reversal. In the case of Ethereum, the neckline was as low as around $3,900 and ETH has recently managed to break it decisively.
Breakout and Critical Levels
Another important indicator that the breakout above the neckline has taken place on Ethereum charts accompanied with an upsurge in trading volume. Consequently, evidence of high buying pressure is presented by higher than average volume trading during the breakout phase. Using the measured move theory—an approach for setting the price objectives—the distance from the head’s low to the neckline is drawn upward from the breakout signal. In this technical point of view, for Ethereum, such a target price is around $4,500.
https://twitter.com/TATrader_Alan/status/1868549881008463958
As is expected, Ethereum has joined the bullish sentiments following the break of the $3,900 neckline but analysts have warned that $3,900 will be a critical level to consider in future. ETH’s inability to sustain above this level negates the bullish formation. The traders are also keeping an eye on other large markets, the political economy of a country, and trends, which affects the future of Ethereum.
The solid breakout from Ethereum’s inverse Head & Shoulders pattern is a bullish technical formation, with $4,500 as the immediate level. While ETH is in an important area of the price chart, players will be focusing on more factors to confirm the upside, including increased volatility and overall market trends.
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