Ethereum (ETH) price is in a sharp decline at the time of this writing, but is actually validating a bullish pattern.
Buoyed by market conditions, the second largest cryptocurrency on the planet reached $4,000.
Ethereum Investors Still Optimistic
Ethereum price fell as low as $3,000 in the last 24 hours, but this proved a major test of the upper trend line of the descending wedge. The profit potential of altcoins is supported by the fact that optimism among ETH holders remains alive.
As the NUPL (Net Unrealized Profit/Loss) indicator shows, ETH holders are still making significant gains. This creates optimism about the rally as they are in the same sentiment zone.
Historically, ETH price has risen more often than not while in this zone. It is expected to be the same this time as well.
Ethereum whales, on the other hand, are slowing down the movement of assets. Overall, total trading volume for the day was $5.09 billion, up from $11.05 billion on Tuesday.
Whale movements are generally considered bearish as they are potentially subject to a correction. However, given the low price of ETH, activity suggests optimism.
ETH Price Prediction: Potential Reversal
Ethereum price at $3,000 remains the support level moving within the descending wedge at $2,991. This bullish chart pattern is characterized by trend lines converging towards lower highs and lower lows. This indicates that the trend is likely to reverse when the price breaks out of the wedge formation in an upward direction.
According to the pattern, the target for ETH is $4,000, which means a 27% price increase. In fact, it is highly unlikely that the price of Ethereum will reach $4,000 in the next month. However, a breakout of this pattern could cause the price to rise to $3,582.
This represents a 13.6% increase in ETH and will encourage further participation from investors.
Read more: Ethereum (ETH) price prediction for 2024/2025/2030
On the other hand, if the Ethereum price passes the support at $2,991, it may decline to the lower trend line at $2,894. Loss of this support could invalidate the bulls and push ETH further below $2,800.
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