Ethereum (ETH) has experienced a significant correction of over 10% from its highs at the beginning of the year, as the market retraces. The price of ETH recently dropped below the $3,300 support level. Despite this pullback, some analysts are optimistic about Ethereum’s performance in the first quarter of the year, suggesting that new highs may be on the horizon.
Ethereum Forming Bullish Pattern
The price of Ethereum declined today after falling below the $3,320 mark. Following the market retracement, the second-largest cryptocurrency by market capitalization saw a 14% drop from its high on Monday of $3,744 to below the $3,300 support level. During the rally at the start of the year, ETH’s price recovered by 20% from the lows of the correction, surging to levels seen before the retracement, which was the first time in nearly three weeks. However, the market pullback, which also affected Bitcoin with a 7.2% decline in 24 hours, caused Ethereum to drop to the $3,210 level on Thursday morning. The price range of $3,200-$3,300 has been a key support zone for ETH throughout December.
Several analysts have suggested that Ethereum is forming an important reversal pattern, which could lead to new highs. Crypto analyst Rekt Capital noted that Ethereum is forming a multi-month inverse Head and Shoulders pattern in the 1M timeframe. He pointed out that the $3,650-$3,760 area is a major resistance region, developing just below the $4,000 level. This resistance level could act as a neckline to the pattern.
No More ‘Major Retraces’ for ETH?
Crypto analyst Ali Martinez shared his view on the bullish pattern, stating that a downswing to $2,900 would be very bullish for ETH. He believes that this would create an excellent buying opportunity to target $7,000 next. However, it is important to note that the bullish pattern would be invalidated if Ethereum falls below $2,800, where the left shoulder was formed.
Another market watcher highlighted the similarities between ETH’s performance in the beginning of 2024 and 2025, emphasizing that the cryptocurrency fell below its yearly opening in January 2024 before climbing higher in the following month. He expressed confidence in Ethereum’s performance in the first half of 2025.
Analyst Crypto Wolf believes that there is likely to be little to no downside left for ETH, suggesting that the cryptocurrency could retrace another 4% to 7% at most before aiming for all-time high levels.
As of the current writing, Ethereum is trading at $3,255, representing a 2.15% decrease in the daily timeframe.
In conclusion, despite the recent pullback in Ethereum’s price, analysts remain optimistic about the cryptocurrency’s performance in the first quarter of the year. The formation of a bullish pattern suggests that new highs could be on the horizon for ETH. Investors will be closely monitoring the price movements of Ethereum in the coming weeks to see if the cryptocurrency can break out to new highs.