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Ethereum (ETH) has surged 7.5% in the daily timeframe to break above a key resistance level for the first time in weeks. Following its breakout, some analysts forecasted that a retest of the range highs could be around the corner.
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Ethereum Reclaims Crucial Area
On Wednesday, Ethereum jumped over 7% from its local low to the $2,550 mark, setting the stage to reclaim another crucial resistance. The King of Altcoins climbed from the $2,380 support to the $2,585 area, hitting a two-week high.
The cryptocurrency has been trading between the $2,400-$2,800 price range since the early May breakout, but briefly lost this area after failing to hold the $2,550 support two weeks ago.
After recovering its local range, ETH struggled to break past the $2,500 barrier, trading between the range low and this resistance for a week. Nonetheless, todayโs market recovery, which also saw Bitcoin jump to the $109,600 mark, has sparked bullish sentiment among investors.
Amid todayโs performance, Daan Crypto Trades called ETHโs price action a โnice move out of the local range.โ However, he suggested that bulls must hold the $2,520 area to confirm it isnโt another deviation or liquidity grab in a โbigger chop.โ
To the trader, failing to hold this area would send the cryptocurrency to the range lows again. As a result, the major levels to watch remain the $2,310 support and $2,735 resistance.
Market watcher Merlijn The Trader noted that Ethereum has โrespected support every single time,โ forming โone of the cleanest breakouts weโve ever seen.โ
He highlighted a three-month ascending triangle in ETHโs chart, pointing out that the King of Altcoins bounced from the rising support line during the recent price deviation and now targets the next key resistance around the $2,700 mark.
Ethereum is charging up. Higher lows, strong base, bullish MACD crossover. A clean break of $2,700โฆ and ETH will fly. $3,000 is just the beginning. The real move comes after that.
ETH To Repeat ATH Set Up?
Merlijn also affirmed that ETHโs two-year setup is repeating, which could signal that a massive breakout is coming. According to the chart, the Ethereum price has moved in stages that last about two years since 2018.
During the first stage, the cryptocurrencyโs price forms a base, which later leads to the second stage, where the price rejects and retests the base lows. Lastly, Ethereum experiences the liftoff phase, where the price breaks out to new highs.
The last liftoff phase, between 2020 and 2022, saw ETH surge from the $100 mark to its $4,878 all-time high (ATH). To the trader, โThis time we start from $1,500. Not a dip. A launchpad.โ
Similarly, analyst Kaleo pointed out the structural resemblance between ETHโs performance this cycle and last cycle. He noted that, while BTC hit a new ATH in December 2020, Ethereum was 60% down from its previous cycle highs, leading many investors to suggest it was โdead.โ
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Nonetheless, ETH climbed over 800% from there, outperforming Bitcoinโs 250% increase in the following months. This time, the cryptocurrency has also seen up to a 68% retrace from its previous ATH, while BTC soared to new highs. If history repeats, โThe bottom for ETH is in. Up only from here,โ the analyst concluded.
As of this writing, Ethereum is trading at $2,568, a 6.1% increase in the weekly timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
