Ethereum’s (ETH) price action has remained underwhelming recently, with a 9% drawdown in September. ETH’s Q3 is en route to becoming the third-worst period in terms of returns since inception.
Yet, favourable technicals are starting to surface for the altcoin as a bullish fractal is reaching a conclusive state.
Ethereum mirrors fractal from 2021, 2024
From a technical standpoint, a market fractal is a historically repetitive pattern that allows traders to identify trend reversals in the charts. Ethereum is currently painting a bullish fractal setup, initially observed in 2021.
The chart below illustrates that the pattern consists of a five-point setup. The pattern witnessed a sharp correction between I and II, and II marks the fractal low value. From II to III, the price recovers to the Fibonacci zone of 0.5-0.618, i.e., the golden zone.
Ethereum 1-day chart. Source: TradingView
IV represents a higher low with respect to II, and V represents a lower high with respect to III. Finally, VI forms an equal low with IV, where a liquidity sweep occurs, and the fractal concludes with a bullish exit.
These key fundamental points must be repeated for another fractal to follow the same pathway.
In 2024, the same fractal pattern can be identified in Q2, which precisely followed the five-point setup and bullish exit post-VI in the market. A sharp price correction was followed by a recovery to the “golden zone” before forming higher lows and lower highs. Now, it is taking shape yet again.
Ethereum 1-day chart. Source: TradingView
Ether has yet to complete VI, which would be another low liquidity sweep around $2,150 (IV) before a potential bullish exit to $3,375, i.e., a 52% rally.
If Ether confirms the last two points of setup, the pattern will be completely identical, increasing the probability of a parabolic rally in the next few weeks.
It is “go time” for ETH price, says analyst
Ethereum has struggled to appease ETH holders in Q3, with the altcoin facilitating a 33% drawdown since the beginning of July.
However, few analysts believe that Ether is primed for renewed rally after a tumultuous period. Javon Marks, an independent market analyst, indicates that ETH is following a pattern from 2023, which led to a 165% rally in Q1 2024. In an X post, Marks highlights that it is “go time” for ETH and says,
“2023 looks to have been the blueprint for another massive upside that can be soon transpiring in this crypto market. Target is at $4,723.5 and a break above can welcome $8,100+ into play, projecting another near 2X in price, if not much, much more.
Like the above analyst’s high target of $8,100, CoinsKid, an anonymous trader, sees a high price of $8,000 based on a setup that has been forming since 2019.
Ethereum analysis by CoinsKid. Source: X.com
The setup in context follows a broadening ascending wedge for ETH, which is close to completing a four-point contact pattern. But, bouncing from the current level is crucial, says the analyst; otherwise, the pattern could be invalidated at $1,511.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.