Ether (ETH) is exhibiting a technical chart pattern, specifically an “ascending triangle”.
This suggests the cryptocurrency is accumulating momentum for a potential significant upward movement beyond the $3,000 valuation.
The Ascending Triangle: A Sign of Accumulation and Bullish Potential
This particular pattern is defined by a consistent horizontal resistance level that has repeatedly capped price advances, alongside an upward-sloping trendline connecting progressively higher support lows.
Over the recent two-week period, Ether has encountered resistance at the $2,735 price point on several occasions.
Simultaneously, the lows established after each pullback have been increasingly elevated, thereby forming the characteristic shape of an ascending triangle.
The formation of these higher lows is a key indicator of strengthening buying interest, which lends a bullish interpretation to the ascending triangle pattern.
In essence, this pattern often signifies a phase of market accumulation that typically precedes a subsequent period of price appreciation.
A conclusive breakout above the upper boundary of this ascending triangle would imply a continuation of the upward trend that originated from the April lows around $1,390, potentially paving the way for Ether to exceed the psychologically important $3,000 mark.
Supporting Technical Indicators: Moving Averages and Volatility Signals
Further reinforcing this optimistic outlook is the anticipated convergence of the 50-day simple moving average (SMA) with the 100-day SMA, where the former is poised to cross above the latter – a “golden cross” event that is widely considered a bullish signal.
The subsequent price action could be characterized by substantial volatility, as suggested by the contraction of the Bollinger Bands.
The spread between these bands has narrowed to approximately $250, a condition that has reliably preceded significant volatility spikes since November.
Bollinger Bands are a standard technical analysis tool comprising a 20-day Simple Moving Average (SMA) flanked by two bands set at two standard deviations above and below the SMA.
Statistical Probabilities and Downside Considerations
According to Chartered Market Technician Charles Kirkpatrick, as noted in his work on technical analysis, upward breakouts from such formations have a historical occurrence rate of about 77%, with these breakouts typically manifesting when the price has traversed roughly 61% of the distance from the pattern’s base to its apex.
It is important to note, however, that a failure to maintain the upward trajectory and a subsequent break below the lower boundary of this triangular consolidation would invalidate the bullish scenario and could potentially lead to an intensification of selling pressure.
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