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Ethereum (ETH) has surged 7.5% in the daily timeframe to break above a key resistance level for the first time in weeks. Following its breakout, some analysts forecasted that a retest of the range highs could be around the corner.
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Ethereum Reclaims Crucial Area
On Wednesday, Ethereum jumped over 7% from its local low to the $2,550 mark, setting the stage to reclaim another crucial resistance. The King of Altcoins climbed from the $2,380 support to the $2,585 area, hitting a two-week high.
The cryptocurrency has been trading between the $2,400-$2,800 price range since the early May breakout, but briefly lost this area after failing to hold the $2,550 support two weeks ago.
After recovering its local range, ETH struggled to break past the $2,500 barrier, trading between the range low and this resistance for a week. Nonetheless, today’s market recovery, which also saw Bitcoin jump to the $109,600 mark, has sparked bullish sentiment among investors.
Amid today’s performance, Daan Crypto Trades called ETH’s price action a “nice move out of the local range.” However, he suggested that bulls must hold the $2,520 area to confirm it isn’t another deviation or liquidity grab in a “bigger chop.”
To the trader, failing to hold this area would send the cryptocurrency to the range lows again. As a result, the major levels to watch remain the $2,310 support and $2,735 resistance.
Market watcher Merlijn The Trader noted that Ethereum has “respected support every single time,” forming “one of the cleanest breakouts we’ve ever seen.”
He highlighted a three-month ascending triangle in ETH’s chart, pointing out that the King of Altcoins bounced from the rising support line during the recent price deviation and now targets the next key resistance around the $2,700 mark.
Ethereum is charging up. Higher lows, strong base, bullish MACD crossover. A clean break of $2,700… and ETH will fly. $3,000 is just the beginning. The real move comes after that.
ETH To Repeat ATH Set Up?
Merlijn also affirmed that ETH’s two-year setup is repeating, which could signal that a massive breakout is coming. According to the chart, the Ethereum price has moved in stages that last about two years since 2018.
During the first stage, the cryptocurrency’s price forms a base, which later leads to the second stage, where the price rejects and retests the base lows. Lastly, Ethereum experiences the liftoff phase, where the price breaks out to new highs.
The last liftoff phase, between 2020 and 2022, saw ETH surge from the $100 mark to its $4,878 all-time high (ATH). To the trader, “This time we start from $1,500. Not a dip. A launchpad.”
Similarly, analyst Kaleo pointed out the structural resemblance between ETH’s performance this cycle and last cycle. He noted that, while BTC hit a new ATH in December 2020, Ethereum was 60% down from its previous cycle highs, leading many investors to suggest it was “dead.”
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Nonetheless, ETH climbed over 800% from there, outperforming Bitcoin’s 250% increase in the following months. This time, the cryptocurrency has also seen up to a 68% retrace from its previous ATH, while BTC soared to new highs. If history repeats, “The bottom for ETH is in. Up only from here,” the analyst concluded.
As of this writing, Ethereum is trading at $2,568, a 6.1% increase in the weekly timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com