Ethereum (ETH) is down nearly 50% over the past year, eroding investor confidence in the second-largest cryptocurrency by market cap. However, crypto analysts suggest that ETH’s fortunes might be about to turn.
Ethereum Set For A Bullish Breakout?
Unlike Bitcoin (BTC), ETH has not significantly benefited from the bullish developments of 2024. While the approval of spot BTC exchange-traded funds (ETFs) opened the floodgates for institutional capital to flow into the top digital asset, ETH ETFs have failed to generate the same level of interest.
Moreover, ETH’s underperformance relative to BTC has only deepened. Crypto analyst Daan Crypto Trades shared the following two-week ETH/BTC chart showing how ETH has consistently broken through key high time-frame support levels against BTC over the past few years.
Currently, ETH is trading at levels not seen since 2020 relative to BTC. According to the analyst, the final major ETH/BTC support lies around 0.016 – nearly 20% below the current level of 0.019.
On a more optimistic note, fellow analyst Ted pointed out that ETH may be breaking out of a downward-sloping trendline on the two-hour chart. He commented:
Global markets are gaining some strength, so expect Ethereum to hold the $1,550-$1,600 level. For now, I’m hoping for a breakout above and close above $1,670 for a rally towards $2K.
Similarly, seasoned analyst Titan of Crypto highlighted that ETH appears poised to break out from an ascending triangle pattern on the weekly time frame. According to him, ETH is currently trading at the bottom of the structure and could be setting up to test the top of the formation around $3,600.
For the uninitiated, the ascending triangle is a continuation pattern that forms when price makes higher lows while facing resistance at a horizontal level, eventually creating a triangle shape. It signals building buying pressure, and a breakout above the resistance line often leads to a strong upward move.
Rising ETH Exchange Reserves Could Suppress Price
While the analysts above point to a potential bullish reversal for ETH, crypto analyst Ali Martinez noted that over 368,000 ETH has been sent to exchanges since the beginning of the month. A rise in exchange reserves for a digital asset is typically bearish news, as it indicates that holders may be looking to sell their assets in the near-term.
Additionally, even if ETH has already bottomed for this market cycle, it still faces strong resistance around the $2,300 mark. At press time, ETH trades at $1,612, down 2.7% over the past 24 hours.
Featured Image from Unsplash.com, charts from X and TradingView.com
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