A key technical chart formation suggests that Ether’s (ETH) price is about to break out toward new all-time highs. Can Ether flip the $4,000 psychological mark into support?
ETH price chart pattern hints at potential breakout
Ether price rose over 27% over the past week, flipping key resistance areas into support.
Following its price rally, Ether has broken out of its falling wedge chart formation, a pattern that indicates a potential reversal from the previous downward trend.
The breakout could signal a rally to new all-time highs, according to pseudonymous crypto trader Jelle, who wrote to his 83,000 followers in a May 27 X post:
“$ETH broke out from the falling wedge, then flipped key areas into support & now pushes for $4,000. New highs and new all-time highs are next.”
The falling Bitcoin (BTC) dominance also suggests that traders’ attention is rotating toward Ether as the ETH/BTC pair has bounced in the past few days. Bitcoin’s dominance fell over 0.98% during the past five days, while Ether's dominance rose 4.4%.
Over the past 24 hours, Ether dominance rose 1.45% while Bitcoin dominance fell 0.57%, according to TradingView.
Related: 4 reasons why Bitcoin was (and still is) a buy below $70K
ETH price needs to close week above $3,956 — analyst
Most of Ether’s current price rally can be attributed to positive developments around the first spot Ether exchange-traded funds (ETFs).
On May 20, Ether price rose nearly 20% within a day, following reports that the United States SEC has U-turned on spot Ether ETFs — possibly due to political pressure — with reports stating it has asked ETF exchanges to update their 19b-4 filings.
Adding to the positive investor sentiment, Ether price could rally to the $4,500 mark before the first spot Ether ETFs start trading, according to Arthur Cheong, the founder and CEO of crypto-focused investment firm DeFiance Capital.
In a May 26 X post, Cheong wrote to his 167,000 followers:
“4.5k before spot ETF goes live for trading [in my opinion].”
However, Ether’s price faces significant resistance at the $4,000 psychological mark. A potential move above $4,000 would liquidate over $433 million worth of cumulative leveraged short positions across all exchanges, according to CoinGlass data.
Ultimately, ETH price needs a weekly close above the $3,956 mark to confirm sustained bullish momentum, according to popular crypto analyst Rekt Capital, who wrote in a May 26 X post:
“Ethereum just needs to Weekly Close above $3956 (green) to move into $4000+ territory. At the moment, #ETH is forming a Lower High.”
Related: Ether ETFs could drive ETH price to $10K, but approval could take until 2025
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.