Ethereum appears poised for a significant breakout above the highly anticipated $4,000 price threshold. Despite this potential, the cryptocurrency has recently fell short expectations of many enthusiasts and retail traders. The long-awaited launch of Spot Ethereum ETFs, instead of triggering a rally, turned into a classic “selling the news” eventleading to disappointment in the market.
However, according to one crypto analyst, the general sentiment around Ethereum remains fundamentally positive. This optimism is largely supported by some bullish investors who continue to hold the cryptocurrency and its stability at a crucial support level of $3,200.
Ethereum Set for a Breakout
In a Tradingview post, crypto analyst RLinda delves into some compelling analysis on Ethereum’s current performance. On the price side, Ethereum corrected by a massive 11.5% in just two days following the launch of Spot Ethereum ETFs on July 23. While it has since recovered some of those losses, Ethereum is still in this corrective phase bound by testing key zones of interest around the 0.5 Fibonacci retracement level and also testing the 200-day moving average (MA-200).
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RLinda’s analysis highlights that this corrective test of the MA-200 triggered a significant breakdown below the critical support level of $3,200, with the price of Ethereum bottoming out at $3,115 on July 25. However, this drop below $3,200 proved to be a false breakdown as triggered a strong influx of buyers which successfully prevented further falls.
To sustain the broader bullish momentum, RLinda emphasizes the importance of bulls keeping Ethereum price above the $3,200 support level. If they succeed, this could pave the way for a fresh bullish rally, potentially leading the price to break through key resistance levels and reach the $4,000–$4,900 range.
“The main task of the bulls is to hold the defense above the zone of interest at $3,200. Further, it remains to wait for the new resistance test with the aim of its breakthrough and a new bullish run to $4,000-$4,500-$4,900,” the analyst said. he said.
Achieving this bullish resurgence would require Ethereum to overcome significant resistance around $3,357 and $3,540, which are identified as strong order blocks.
Current Price Action
At the time of writing, Ethereum is trading at $3,370, having recovered 4.78% from a low of $3,219 in the past 24 hours. This recovery puts the cryptocurrency just above the first RLinda resistance level of $3,357.
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Ethereum’s trajectory could unfold in two ways. The cryptocurrency could continue its upward momentum and test the next significant resistance at $3,540. Successfully clearing this level could pave the way for a breakout above the order book, signaling further upside potential towards $4,900. Conversely, Ethereum could face a reversal, potentially falling below $3,300. This would suggest a retest of lower support levels and a possible extension of the consolidation phase.
Featured image created with Dall.E, chart from Tradingview.com