The first decisive break above the psychological $4,000 level, which serves as a resistance trendline to a five-month-old ascending triangle and a cup and handle pattern, could signal the start of a textbook price rally in the coming sessions.
In detail, the Ascending Triangle pattern has a profit target of $6,250, which is calculated by measuring the widest distance between its horizontal and rising trend lines and adding the output to the potential breakout level of $4,000.
Simultaneously, the Cup and Handle pattern, which has a slightly lower success rate than the Ascending Triangle, indicates a potential run-up toward $6,550 in the coming sessions, up by 56% from current levels.
Its profit target is determined by measuring the distance between the Cup’s right peak and bottom and multiplying the result by the potential breakout level of around $4,000 — the same as the Ascending Triangle.
Trading volume, which has been declining throughout the patterns mentioned above, is one of the primary catalysts that support the two bullish indicators.
This indicates a lack of confidence among traders. Meanwhile, the relative strength index (RSI) is below the overbought level of 70, indicating that there is still room for a bull run.
The bullish outlook for ETH follows a market-wide uptick led by Bitcoin’s (BTC) 29 percent month-to-date price increase.
According to CryptoWatch, the 30-day correlation coefficient between Bitcoin and Ethereum is near 0.89, implying that the two assets have an 89 percent chance of moving in sync.