Ethereum trades above $2,500, holding key support at $2,532.13 despite a 1.9% daily decline.
Price forms an ascending wedge after breakout from long-term downtrend, eyeing resistance at $2,630.57.
The current setup suggests a 63% rally toward $4,200, should bitcoin breakout above the resistance level of $2,630.
Ethereum (ETH) continues to move within a critical range with the price at $2,552.93. The asset showed a 1.9% dip in the past 24 hours, but it is above the essential support rate of $2,532.13. The upper edge of an emerging ascending channel pattern is the vital support/resistance zone of $2,630.57, which traders are awaiting before going into action.
According to analyst Clifton Ideas, a breakout from this structure may open the path toward a significant price advance, potentially targeting the $4,200 level, according to the latest technical chart setup.
Price Action Forms Bullish Structure After Exit From Downtrend
The recent ETH/USDT chart shows Ethereum previously trading within a descending channel. This downtrend persisted through early 2024, with consistent lower highs and lower lows.
But in May, ETH broke out of the channel with heavy bullish energy. The breakout was accompanied by a precipitous rise that sent ETH from below $1,900 to way above $2,500 within a few days.
https://twitter.com/clifton_ideas/status/1941011202265829853
Once the breakout happens, price action goes into a period of consolidation between two trending trend lines that are coming in closer. The current pattern is suggestive of an ascending wedge. The support and resistance of the wedge are gradually deteriorating. As the structure grows, market participants are watching the higher resistance trendline intently for a possible breakout signal.
$2,630 Resistance Remains Immediate Barrier Before Breakout Zone
Nevertheless, recent retreats notwithstanding, ETH is currently positioned above the nearby support zone of $2532.13. The intraday trading range indicates that ETH is trading between this support and the resistance of the $2,630.57 mark. This range serves as a decision zone for short-term momentum.
If the price breaks and sustains above the $2,630 level, it may validate the bullish wedge formation. This would confirm a continuation of the previous breakout trend from the descending channel. As indicated by the chart, the projected upside in such a case points toward the $4,200 price area, reflecting an approximate 63% increase from current levels.
Technical Setup Signals Potential for Sharp Move Toward $4,200
The breakout projection marked on the daily chart outlines a green zone highlighting the target range between $3,000 and $4,200. This area aligns with the measured move based on the height of the previous rally. The chart also shows a possible pullback to retest the breakout zone before continuation.
This technical setup remains valid as long as the price stays within the wedge pattern and above its lower support boundary. Failure to hold this structure may invalidate the current bullish outlook and shift focus back to support levels. Until then, price movement near the resistance trendline will likely guide market sentiment.
