Ethereum (ETH) has experienced a notable 4.7% recovery in the past 24 hours, regaining a critical support area. This resurgence has sparked optimism among some market observers, who believe that the cryptocurrency could surpass a key resistance level in the near future.
Almost a week ago, Ethereum surged above $4,000 for the first time in nine months, approaching its previous high and the eagerly anticipated $4,100 resistance level. However, the cryptocurrency’s upward momentum was briefly halted following a significant market pullback.
Earlier this week, ETH retraced by nearly 10%, dropping below the $3,500 mark as Bitcoin also experienced a decline to $95,000. Subsequently, the second-largest cryptocurrency by market capitalization has gradually climbed back up, reclaiming the $3,800 support zone on Wednesday.
ETH’s price then increased by another 2% in the early hours of Thursday, trading above $3,900 once again. With Ethereum reclaiming this crucial zone, prominent Crypto analyst Carl Runefelt pointed out that the cryptocurrency was trading above its ascending support trendline, which it had lost during the market correction.
Furthermore, Ethereum was retesting a six-day downtrend line in the 4-hour chart, indicating a potential surge towards $4,000 after a successful breakout above the $3,940 mark.
Following this, Ethereum broke above the resistance and reached a daily high of $3,985 before retracing to $3,945. According to the analyst, maintaining this level could propel ETH’s price towards $4,100 in the coming days.
Looking ahead, some analysts believe that Ethereum still needs to successfully convert another multi-year resistance into support. Analyst Alex Clay highlighted that ETH has been testing the $9,350 level since 2021 without successfully turning it into support over the past few years.
Despite facing rejection at this resistance level on four occasions, when Ethereum managed to break and hold this level in the past, it surged towards its all-time high of $4,878 about three years ago.
Crypto analyst Jelle suggested that Ethereum is gearing up for significant movements as it recently broke out of a multi-year pennant pattern. ETH-based Exchange-traded funds (ETFs) have experienced a substantial increase in demand since the post-election rally.
Additionally, institutional interest in Ethereum seems to be growing, with data from Farside Investors indicating over $500 million in inflows into ETH ETFs this week and over $1.3 billion since the beginning of the month.
Moreover, the Donald Trump-backed DeFi project World Liberty Financial Initiative (WLFI) recently acquired around $10 million in ETH. This move has been interpreted as a signal of approval from institutions for Ethereum.
In conclusion, if Ethereum manages to reclaim the $3,950 resistance level as support, analysts anticipate that there will be little resistance towards new all-time highs, with a potential target of $5,000. As of the latest update, ETH is trading at $3,951, reflecting a 4.7% increase in the daily timeframe.
Sources:
– NewsBTC
– Unsplash.com
– TradingView.com