Ethereum’s native token Ether (ETH) could rise to above $10,000 over the next few weeks, as it creates what appears like an “ascending triangular” technical pattern.
Technicals for Ether’s Price
Ascending triangles signify bullish continuation setups. They are most common during an uptrend. Analysts confirm their existence when the price rises within a rising right angle triangle structure. This creates a sequence with lower highs on lower trendlines and resistance at the upper. Volumes tend to drop as the pattern develops.
Ether has formed a similar upside pattern so far on its weekly chart. The lower trendline of the triangle has been acting as an accumulation zone since the beginning 2021. There is high selling pressure at its upper trendline as illustrated below.
Weekly price chart for ETH/USD featuring ascending triangle pattern. Source: Wolf, TradingView
Ascending triangle patterns can be used to precede significant price rallies. This is based on the distance between the upper trendline and the lower trendline, measured starting at the breakout level.
The same characteristics can be applied to Ether’s ascending channels. Ether can experience a decisive breakout towards $10,000. A second technical pattern shows a bullish target at $4,000.
Wolf, an independent market analyst, predicted Ether would rebound in the coming sessions. This was followed by a prolonged recovery move owing a potential inverse heads-and-shoulders pattern.
$2542 was HIT and provided some support. We hope to have another HL. $ETH https://t.co/5J5zBRODlb
— Wolf (@IamCryptoWolf), February 23, 2022
Is the ETH price a bull trap?
After hitting a low of $2,150 in January 2022, Ether maintains its profit. ETH/USD rallied more than 25% in just four weeks.
Some analysts view the Ether market’s ongoing recovery rally as a bull trap. This is a reversal that could cause traders who are on the wrong side price action to sell their positions and suffer unexpected losses. TheTreeTrader is a TradingView-based market commentator.
Related: This bullish Ethereum options trading target $3.1K ETH with zero liquidation risk
TT ignored Ether’s ascending triangle and instead focused on a downward sloping trendline acting resistance since November 2021.
ETH is trading below the price ceiling. However, its momentum indicators, mainly relative weakness index (RSI), Moving Average Convergence Divergence(MACD), and Stochastic RSI have been trending upward.
Daily price chart for ETH/USD. Source: TradingView/TT
ETH is confirming a bearish divergence in its momentum and price, which can lead to a price reversal. TT said that Ether might drop as low as $2300 if such a move happens.
TT said that a breakout above the descending trendline resistance would change the Ether market bias towards bullish.
Ether’s bull trap is also a concern due to its past of creating technical setups with an upside bias but failing to deliver a breakout.
Cointelegraph reported that Ether was rumored to form an ascending channel pattern similar to the one seen in October 2021. The breakout target for Ether was nearly $6,500, compared with its current price of $3,750. The Ethereum token fell to $2,100 two weeks later, invalidating the bullish continuation setup.
Ethereum’s network growth
Even though there is a mixed outlook on Ethereum, the network metrics tell an optimistic tale.
Ethereum, for instance, attracted 18.36 million addresses to its network in 2021, at a rate of 1.53 million per monthly, which is indicative of steady user growth.
Number of Ethereum addresses that have a balance above zero. Source: Glassnode
Glassnode data also showed that the number of Ethereum addresses with at least one ETH was at record levels in February. It reached 1.42 million on its ninth day.
On February 15, the number of addresses that are not zero and those who have at least 0.01 ETH reached a new peak, reaching close to 75 million and 7 millions, respectively.
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