Ethereum forms a bullish pennant; breakout above $2,550 could trigger a rally to $3,500+.
Strong institutional buying and declining exchange reserves signal growing confidence in ETH.
Golden cross and solid 200-day EMA support boost Ethereum’s medium-term bullish outlook.
Ethereum is trading within a narrowing range between $2,400 and $2,750, forming a textbook bullish pennant pattern. With technical support near $2,500 and growing institutional interest, analysts say a confirmed breakout above $2,550 could open the path toward a rally with targets above $3,500.
Technical Setup Builds Toward Potential Breakout
The current Ethereum price structure shows consolidation after a strong move from $1,900 to $2,730, forming the base of the bull flag. ETH is holding above key support at $2,300, which has been tested multiple times but not broken. The $2,550 level remains critical, and a breakout above this line would complete the pennant.
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According to analysis prepared by crypto analyst Martinez, Ethereum shows signs of strength as it continues to build higher lows, while the 200-day EMA offers solid structural support. Martinez identifies $3,100 as the next major resistance, with a clean breakout above this zone potentially extending gains further toward $3,500.
Ethereum also recently registered a golden cross on the 12-hour chart, with the 50-day simple moving average crossing above the 200-day average. Such crossovers are often linked to medium-term bullish trends, especially when combined with rising RSI and volume.
Institutional Accumulation and On-Chain Strength Support the Trend
Institutional demand remains strong. According to Arkham Intelligence, Abraxas Capital purchased 350,703 ETH since May 7, with a recent addition of 46,295 ETH worth $115.3 million. This accumulation reflects growing confidence, with an average buy price of $2,386.
Ethereum’s exchange reserves are declining, indicating tighter supply. Spot ETF inflows also resumed, with $64.8 million added on May 20 alone. Data from Coinglass shows open interest in Ethereum futures holding steady at $31.32 billion, while recent price action suggests buyers are defending key zones.
If Ethereum clears the $2,550 resistance with strong volume, the current setup could initiate a move toward $3,500 and beyond.
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