An analyst has explained how Ethereum could be eyeing $10,000 next, if it manages to break past the resistance line of this technical analysis pattern.
Ethereum Is Nearing A Retest Of This Resistance Line
In a new post on X, analyst Ali Martinez has talked about how ETH is looking from the perspective of a technical analysis (TA) pattern. The pattern in question is a Parallel Channel, which forms whenever an asset’s price witnesses consolidation between two parallel trendlines.
There are a few different types of Parallel Channels, but the one of interest in the current discussion is the variant that has its trendlines parallel to the time-axis. This type appears when the cryptocurrency shows consolidation in an exactly sideways manner.
Like other consolidation patterns in TA, the upper level of the Parallel Channel is assumed to be a source of resistance and the lower one that of support. A break out of either of these bounds can signal a continuation of trend in that direction. That is, a surge above the channel can be a bullish signal, while a fall below it may be a bearish one.
Now, here is the chart shared by the analyst that shows the Parallel Channel that the 1-week price of Ethereum has been trading inside for the last couple of years:
As is visible in the above graph, Ethereum retested the lower level of the Parallel Channel earlier in the year and successfully found support at it. Since then, the coin has been marching up and its latest rally has brought it close to the upper level of the pattern, situated around $4,000.
ETH has tested this level three times during the last couple of years and all of the instances resulted in it being rejected. In the scenario that the asset can find an escape this time, however, a bullish breakout might follow.
“If Ethereum $ETH can break past $4,000, we could be looking at $10,000 next!” notes Martinez. The level is based on the fact that Parallel Channel breakouts can end up being of the same length as the height of the channel. It now remains to be seen if Ethereum will retest the upper level of the pattern in the near future and whether it would be able to find a break.
In some other news, ETH has seen a surge in the supply held by First Buyers, according to data from the on-chain analytics firm Glassnode.
First Buyers refer to the ETH investors who have purchased the cryptocurrency for the first time. The supply held by this type of holder has increased by 16% since early July, indicating that fresh inflows have been coming into the asset.
ETH Price
Ethereum has seen a rally of more than 25% in the past week, which has brought its price to $3,750.
