Ethereum, the second largest cryptocurrency by market capitalization, has been facing challenges as it struggles to break above the $3,000 mark. Despite Bitcoin hovering near all-time highs, Ethereum has been under pressure from selling pressures, leading to a bearish sentiment in the market. Analysts are closely monitoring the price action, with some predicting a potential relief rally while others warn of a possible crash below $2,000.
One analyst, Weslad, has been closely monitoring Ethereum’s price trajectory using the ABCDE wave structure. According to Weslad, Ethereum formed a large-scale symmetrical pennant back in 2021 when the price reached a peak of $4,851. This pennant has continued to shape Ethereum’s price movement over the years, with the analyst suggesting that the altcoin is currently in a long-term accumulation phase within a defined corrective range.
The ABCDE wave pattern, which predicts peaks and troughs in asset prices, is currently indicating a bullish scenario for Ethereum. Weslad believes that Ethereum is currently in a D wave, approaching the upper boundary of the pennant. If this D wave plays out as expected, Ethereum could see a surge in price, potentially surpassing $3,500 before completing the move.
Additionally, the formation of an Inverse Head and Shoulders Pattern is also supporting the bullish case for Ethereum. The key resistance level at $2,855 has been a major hurdle for Ethereum this year. However, if Ethereum manages to break above this level and combine it with a breakout from Wave D, the price could rally to new all-time highs above $6,000.
Despite the bullish outlook, there is also a bearish scenario to consider. After the completion of the D wave, the next wave in the sequence is the E wave, which is typically a bearish wave. A temporary rejection at the neckline or pennant resistance could trigger an E wave retracement, leading to a potential 30% crash in Ethereum’s price, bringing it back to the $1,400-$1,800 support level.
As Ethereum’s price continues to navigate through these patterns and structures, traders and investors are advised to closely monitor the price action for any decisive moves. The crypto market remains highly volatile, and any breakout could mark the beginning of a new phase of long-term price expansion for Ethereum.