This Ethereum price chart pattern shows that ETH could hit $ 6.5,000 in the fourth quarter
Ethereum’s native token Ether (ETH) is up more than 415% to over $ 3,800 this year, and two large bullish patterns developing on its chart indicate scope for further upward movement, eventually towards a price range of 6,200 $ to $ 6,500.
ETH price breaks the USD 4,000 resistance
The first major break above the psychological $ 4,000 mark, which acts as a resistance trendline towards the 5 month old ascending triangle and cup-and-grip pattern, could trigger a price rally in the upcoming sessions.
Specifically, the $ 6,250 level appears as the profit target for the ascending triangle, which is calculated by measuring the greatest distance between its horizontal and ascending trend lines and adding the output to the breakout level of about $ 4,000.
Therefore, the price boom reflects the corresponding movement of around 64%.
At the same time, the cup-and-handle pattern, which has a slightly lower success rate than the ascending triangle, shows the possibility of a rally to $ 6,550 in the coming sessions, an increase of 56% from current levels.
His profit target is achieved by measuring the distance between the top right edge of the cup and its bottom edge and adding the result to a potential breakout of about $ 4,000 – just like with the ascending triangle.
One of the main catalysts that support the two bullish indicators is trading volume, which has declined while the above patterns were being formed. That shows weak consolidation among traders. The Relative Strength Index (RSI) below the overbought threshold of 70 also suggests enough headroom for a rally.
Bitcoin correlation effect
The optimistic outlook for ETH comes after a market-wide bull boom, led by Bitcoin’s monthly bull run of 29%.
According to CryptoWatch, the 30-day correlation between Bitcoin and Ethereum is close to 0.89, which means the success rate of the two synchronously moving assets is 89%.
Ecoinometrics, a crypto-focused newsletter service, found a positive correlation when it highlighted the response in ether price to Bitcoin’s “halving”, a preprogrammed event that cuts BTC’s issuance rate by half every four years compared to the supply cap of 21 million.
The portal examined the price reaction of Bitcoin and Ether to the previous two halves and used the data set to predict their highs after the third halve, which occurred on May 11, 2018. 2020. As a result, it is forecasting an increase in BTC by 29.5 times to reach $ 253,800. until the end of November 2021.
Similarly, Ecoinometrics marks $ 22,300 as the price target of Ether for the same period, based on its 120x bull run after Bitcoin’s second halving.
ETH supply still in crisis
More bullish signals for Ethereum have come in the form of its sustained supply.
Related: Ethereum Price Hits $ 3,800, Driving Bulls To Take Control Of ETH Options On Friday
It is noteworthy that the total amount of Ether that was paid into the smart contract Ethereum 2.0 reached an all-time high of around 7.98 million ETH on Monday. These tokens remain blocked / non-transferable for a year or more.
Meanwhile, the total amount of Ether held across all exchanges remains at a record low, with CryptoQuant reporting 18,187 million ETH in reserve on Monday, compared to 23,323 million ETH a year ago.
In addition, crypto-data tracking company Santiment reported a surge in new Ether addresses last week, while the number of other Ether wallets failed to hit the record high of 64.5 million.