ETH could reach above $10,000 in the coming weeks as it plots an “ascending triangle” technical pattern.

Technical indicators are showing bullish signs

An ascending triangle is a bullish continuation setup that occurs during an uptrend. Analysts confirmed their presence after prices rallied within an upward-sloping right triangle, creating a series of lower highs above the lower trendline with resistance at the upper line. As the pattern develops, the volume usually decreases.

So far, ETH has been forming a similar bullish pattern on the weekly chart. Specifically, the lower trendline of the triangle has been functioning as an accumulation range since early 2021, with selling pressure high at the upper trendline, as shown below.

Source: TradingView

The basic premise of ascending triangle patterns is that they can precede a significant price rally – equal to the maximum distance between the upper and lower trendline measured from the breakout level.

Applying the same trait to ETH ascending channel, the price could decisively break out towards $10,000. On the higher time frames, another technical pattern draws a bullish target of $4,000.

Independent market analyst Wolf is also forecasting a recovery in ETH in the coming sessions, followed by an extended recovery move on the back of a possible inverted head and shoulders pattern.

ETH bull trap?

The bullish triangle setup comes as ETH has held gains since bottoming near $2,150 in January 2022. In the process, ETH rallied over 25% in less than 4 weeks.

However, some analysts view the ongoing rally in the ETH market as a bull trap – meaning a trend reversal can trick traders into making incorrect predictions about price action and force them to liquidate positions at high levels. One of them is TheTreeTrader, short TT, a market commentator based on TradingView.

Ignore ETH, TT .Ascending triangle focus entered a downward sloping trend line that has acted as resistance since November 2021.

However, with ETH trading below a certain price cap, momentum indicators like the Relative Strength Index (RSI), Moving Average Convergence Divergence (MACD), and Stochastic RSI are trending higher.

 Source: TradingView

As a result, ETH has confirmed a bearish divergence between price and momentum. This pattern often leads to price reversals. If such a move occurs, TT noted that ETH could fall as low as $2,300.

Conversely, a successful break above the descending trendline resistance is likely to shift the direction of the ETH market to the upside.

Concerns about the ETH bull trap also remain as its history has drawn technical setups with a bullish bias but failed to provide any breakout movement.

For example, ETH is proposing to form a similar ascending channel pattern in October 2021 with a breakout target near $6,500 from then-current price levels around $3,750. However, ETH fell to $2,100 the following week, rendering the classic bullish continuation setup obsolete.

Ethereum network development situation

Despite the mixed outlook, Ethereum’s network indicators tell a bullish story.

For example, in 2021, Ethereum added around 18.36 million new addresses to the network at a rate of 1.53 million per month, reflecting steady growth in user numbers.

Number of Ethereum addresses with non-zero balances | Source: Glassnode

Meanwhile, the data from Glassnode shows The number of Ethereum addresses with at least 1 ETH also hit an all-time high in February, reaching 1.42 million on Feb. 9.

Additionally, the number of non-zero addresses and those with at least 0.1 ETH surged to new highs on Feb. 15, reaching nearly 75 million and 7 million, respectively.

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