Ethereum price returned to the upside on Wednesday, gaining 2.4% at the time of writing to recover from successive two days of decline. ETHUSD has recently broken upwards after forming a cup and handle pattern previously, signaling a potential rally to $3,900.
A cup and handle pattern consists of two distinct shapes. The “cup” was formed when Ethereum price declined and then rose by nearly the same height. The handle was formed during the recent pullback. Therefore, a breakout to the upside of the handle signifies investors’ willingness to continue buying the asset at a higher price.
On the cup and handle pattern, we measure the depth of the cup and use it as a yardstick to get the price target. The price target is obtained by extrapolating the obtained measurement from the cup’s brim near the intersection with the “handle”.
In our case on the 4-hour chart below, the cup’s height was approximately $427. Adding that to the brim at the handle’s intersection gives a minimum price target of $3,871. Therefore, ETH price is likely to target the psychological $3,800 support. That is equivalent to an upside of 11% from the current price.
Also, on-chain metrics support a continuation of the upside. The trading volume is on the rise amidst a rising price trajectory, signaling bullishness around the stock.
Also, Ethereum chain’s DeFi TVL has risen by 2.78% to $72.97 billion in the 24 hours preceding this writing and by 8.54% in the last seven days, as per DeFiLlama data. That shows increasing utility for ETH, which augurs well for the price’s upside.
Meanwhile, whale transactions have risen substantially in the last three days. According to IntoTheBlock, the number of transactions valued at $100,000 or more have risen from 6,548 to 9,874 in that time window. That signifies rising demand, which could fuel ETH price upsurge.
This post was last modified on Dec 04, 2024, 09:46 GMT 09:46