Ethereum could reach $10,000 in the coming weeks due to the formation of an ascending triangle.
The possible emergence of an ascending triangle in the price of Ethereum could push the second most important cryptocurrency in the market towards $10,000 in the coming weeks. In addition, it accumulated 18.36 million new addresses in its Blockchain in 2021, according to Yashu Gola, as reported by Cointelegraph.
Ascending triangles are bullish continuation setups that appear during an uptrend. Analysts confirm its presence after the price rises within an ascending right triangle structure, thus forming a sequence of lower highs at the lower trend line with resistance at the upper one. As the pattern develops, volumes typically drop.
What the Weekly Charts Show
Until now, Ethereum has been forming a similar bullish pattern on its weekly chart. In detail, the lower trend line of the triangle has been acting as an accumulation range since early 2021, with high selling pressure at the upper trend line.
A basic tenet of ascending triangle patterns is that they can precede a significant price rally, as much as the maximum distance between the upper and lower trend lines, when measured from the breakout level.
Applying the same feature to the ascending channel, it can experience a decisive breakout towards $10,000. On higher timeframes, another technical pattern paints a bullish target of $4,000.
Wolf, an independent market analyst, also anticipated Ethereum to rally in the coming sessions, followed by a prolonged recovery move due to a possible inverse head and shoulders pattern.
The bullish triangle setup emerges as Ethereum maintains its gains after bottoming near $2,150 in January 2022. In doing so, ETH/USD is up more than 25% in less than four weeks.
However, some analysts see the ongoing recovery rally in the Ethereum market as a bull trap, that is, a reversal that could force investors on the wrong side of the price action to liquidate their positions at unexpected losses. One of them is TT.TreeReader, now TT, a market commentator based on TradingView.
Leaving the ascending triangle aside, TT focused on a downward sloping trend line that has acted as resistance since November 2021.
Nonetheless, since it is trading below the given price high, its momentum indicators, primarily the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Stochastic RSI, have been trending up.
As a result, there has been confirmation of a bearish divergence between its price and its momentum, a pattern that usually leads to a price reversal. If such a move occurs, TT noted that the price could drop to as low as $2,300.
The Growth of the Ethereum Network
Despite a mixed outlook, the metrics of the Ethereum network tell an upbeat story. For example, Ethereum attracted around 18.36 million new addresses to its network in 2021 at a rate of 1.53 million per month, reflecting steady user growth.
Meanwhile, data from Glassnode showed that the number of Ethereum addresses holding at least 1 ETH also hit a record high in early February, reaching 1.42 million on the ninth day of the month.
Ethereum is trading at $2,700 and the location of the moving averages, the 70-period one above the 200-period one, would give us a bullish signal. This would happen although the first is heading with the intention of crossing below the second.
By Audy Castaneda
