The crypto market is gradually regaining an “upward” sentiment as the Bitcoin price surges toward $70,000. This new momentum led crypto analysts to predict a bottom formation for Ethereum and a potential surge towards $4,000.
However, ETH price showed a slight decline of 2.73% today, reaching $2,667, with a market cap of $322.2 billion. This retracement coincides with a 72% spike in 24-hour trading volume, indicating that the risk of a correction still exists.
Analysts call bottom, Ethereum price set to rise by $4,000
Cryptocurrency analyst McKenna has given a bullish outlook on Ethereum, the second-largest cryptocurrency, in a recent tweet amid recent price increases. The attached chart highlights the breakout in ETH price from the symmetrical triangle pattern on the daily chart. Since August 2024, this chart setup has driven a consolidation trend within two converging trend lines, with a bullish breakout recorded last Sunday.
After a notable price drop, this breakout indicates that Ethereum price has bottomed out and is poised for a big rally. Cryptocurrency analysts emphasized that the $2,850 asset recovery signals a risk-on environment for traders.
Adding to the bullish sentiment, he said, “A Trump victory in November would not only re-establish the trend market, but accelerate it beyond anyone's expectations.”
If Ethereum price predictions hold, post-breakout gains could exceed $3,600.
Ethereum MVRV’s sharp rise signals short-term downside risk
The 30-day market value-to-realized value ratio (MVRV) recently surged over 6%, according to Santimento data. This on-chain indicator assesses whether an asset is overvalued or undervalued by comparing the current market price and the average price at which each token was acquired.
The current positive value indicates that short-term buyers have significant unrealized gains, increasing the risk of a potential sale. The relationship between ETH and MVRV ratio in July and September last year suggests that the current price trend may witness a notable decline in the near future.
In the crypto market today, Ethereum price is showing a -2.7% long red candlestick, retesting the triangle pattern trendline as potential support. The decline, backed by $19.2 billion in trading volume, reflects sellers' confidence in stopping further gains.
On a bearish note, if the daily ETH candlestick closes below the 100-day EMA and $2,650, it could give the bears further leverage to push the price lower.
The fall after the stock market crash could see the asset fall 9% and seek support at $2,400.
Therefore, sustainability of Ethereum price above $2,650 is essential to achieving the triangle breakout goal.
Frequently asked questions (FAQ)
Yes, analysts predict that Ethereum has formed a bottom after its recent breakout from a symmetrical triangle pattern, setting the stage for a potential rally towards $4,000.
Ethereum needs to hold support above $2,650 to avoid a potential bullish trap and prevent further bearish momentum.
The 30-day MVRV ratio has recently surged above 6%, indicating that short-term buyers are indulging in unrealized gains.
Sahil Mahadik
Sahil is a dedicated full-time trader with over 3 years of experience in financial markets. He has a strong grasp of technical analysis and keeps a close eye on daily price movements of top assets and indices. Drawn by his fascination with financial products, Sahil enthusiastically embraced the emerging field of cryptocurrencies and continues to explore opportunities driven by his passion for trading.
Disclaimer: The content presented may contain the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.
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