Ethereum Price Rebounding 16% Triggers Classic Bullish Pattern – $ 2.5,000 Next?

Ether, the native cryptocurrency of Ethereum (ETH), rebounded sharply Thursday after Elon Musk first revealed that his private rocket company SpaceX holds Bitcoin (BTC) and that Tesla can still have the option of using Bitcoin for their electric car to pay.

BTC / USD is below $ 30,000 but has rebounded more than 5% after the big reveal to hit an intraday high of $ 32,895. Ether, which tends to move in step with the top cryptocurrency, is similarly optimistic.

On Wednesday it rebounded $ 2,000, up 18.20% from the weekly low of $ 1,720.

Lukas Enzersdorfer-Konrad, product manager at financial services company Bitpanda, told Cointelegraph in a statement emailed that Ethereum will continue to be tied to Bitcoin in the coming sessions.

“As soon as” the big brother “finds support,” he added, “Ethereum will most likely follow.”

Classic model with a target of $ 2.5K for Ethereum

The recent rally in the Ethereum market was also due to the previous level of support that limited Ether’s bearish attempt.

The independent market analyst, known under the pseudonym Rekt Capital, has displayed what is known as an “orange zone” on the weekly ETH / USD chart, illustrating the three price declines and their ability to prevent the pair from falling.

“Since its recovery from the orange zone, ETH has recovered + 16%”, analyst to explainthat combines the price floor with a support trendline to form a falling wedge.

In particular, bearing wedges are bullish reversal patterns that start high up but contract on declines to form a series of lower highs and lower lows. A bullish confirmation occurs when price breaks the upper wedge trendline on a surge in volume.

The bulls set their bullish profit target up to the maximum wedge height.

Ether price checks almost all of the boxes when it comes to trading within the falling wedge pattern. Rekt Capital highlighted the same thing in a chart it released on Thursday.

“As long as the ETH holds the floor of the structure as a support until the end of the week, [it] Rekt Capital will confirm a return to structure after a brief loss earlier this week, ”added Rekt Capital.

The maximum distance between the top and bottom trend lines of the wedge is about $ 850. Hence, a break above the top trendline can bring the price down to at least $ 2,500, according to the classic technical setup.

Related: Front Split? Bitcoin and Ethereum could finally break their 36-month correlation

However, the price remains exposed to a sharp drop below $ 2,000 due to the short-term technical setup, as shown in the chart below.

The daily Ethereum chart shows that the price could fluctuate between $ 1,850 and $ 2,080 before a bullish breakout is likely, Rekt Capital noted.

Kirkpatrick and Dalquist’s book, Technical Analysis, states that falling wedges have a failure rate of only 8-11%. Additionally, the likelihood of a bearish breakout has a higher failure rate of 15% to 24%.