Ethereum Price Action Signals Potential “Altseason” as It Aims for $4.1K Target
Ether (ETH), the native token of the Ethereum network, has recently surpassed a critical technical indicator that has historically signaled substantial price increases and initiated periods of broad market rallies in alternative cryptocurrencies, commonly known as “altseasons.”
This pattern has recurred across several market cycles within the last five years.
Notably, previous instances where Ether closed above a specific threshold on the Gaussian Channel coincided with dramatic expansions in the combined market capitalization of altcoins (excluding ETH), which surged by 1,400% and 200%, respectively.
Historical Precedents Point to Significant Upside Potential for ETH
The key technical level under observation is the mid-line (approximately $2,600) of the Gaussian Channel, a moving average-based indicator designed to track long-term market momentum, viewed on the 2-week chart.
Historical analysis reveals that during the 2020-2021 cycle, ETH’s value appreciated from roughly $400 to over $4,800 after a definitive close above this Gaussian mid-line.
A similar technical development in late 2023 saw ETH’s price climb from below $1,500 to nearly $4,000 within a one-year timeframe.
On both prior occasions, following the mid-line breach, ETH’s price rapidly advanced towards and ultimately surpassed the upper band of the Gaussian Channel as bullish momentum intensified.
As of May 2025, this upper band is positioned near $3,200, establishing it as the immediate subsequent resistance level.
A successful breakout above this point could create a pathway for ETH to target its previous cycle high of around $4,100 by July.
Analysts Suggest Ethereum’s Momentum Could Catalyze Broader Altcoin Rally
Market analyst Moustache, referencing the identical Gaussian Channel fractal, posits that a sustained upward movement in ETH’s price could catalyze a corresponding rally across the wider altcoin market.
This assertion is supported by historical data: the aggregate market capitalization of altcoins (excluding Ethereum) increased by more than 1,400% over the year following Ether’s close above the channel’s mid-line in July 2020.
Likewise, the altcoin market cap grew by over 200% in the year after ETH’s mid-line breakout in November 2023.
The prospect of an “altseason” materializing in 2025 gains further credence from recurring patterns observed following Bitcoin halving events.
In both 2017 and 2021, Bitcoin’s market dominance experienced a notable contraction approximately 400 days after its halving, a period that historically triggered significant altcoin rallies.
With the April 2024 halving approaching a similar temporal juncture, a comparable decline in Bitcoin dominance could occur within the next 100 days.
Analyst Wimar X anticipates that if this historical trend replicates, the total market capitalization of altcoins could expand towards the $15 trillion mark.
On-Chain Metric Indicates Potential Near-Term Price Vulnerability
Despite these favorable technical indicators, certain on-chain data points suggest a degree of vulnerability in ETH’s current price structure.
According to information from Glassnode, a considerable volume of ETH’s circulating supply, valued at approximately $123 billion, is held by investors who acquired their tokens in the price range of $2,300 to $2,500.
Should ETH’s price decline even moderately below this cost-basis zone, a large cohort of these holders would see their investments turn unprofitable.
Such a scenario could escalate the risk of widespread selling driven by panic, thereby exerting downward pressure on the market.
Consequently, while Ethereum currently exhibits technical strength, its immediate support level is relatively tenuous unless its price can establish a more significant margin above this critical cost concentration zone.
Also Read: Ethereum Rises 4% on Heavy Volume as Institutional Interest Grows
