Ethereum is psychologically poised for a bounce above $3,000, but analysts are warning of more potential downside ahead of a breakout.
Ethereum price appears ready to reach $3,000.
Ethereum (ETH) price may be preparing for a bounce above $3,000, according to technical chart patterns appearing on the daily chart.
In an October 17 X post, the analyst wrote:
“The short-term target price for the ETH inverse (head and shoulders) reversal price pattern is $3,000.”
ETH/USD, 1-day chart, inverted head and shoulders pattern. Source: Mikybull
The head and shoulders pattern is used by technical analysts as a signal that forms at the end of a downtrend, indicating a bullish price reversal.
Others predict that a new all-time high for Ethereum could occur in the first quarter of 2025.
According to a technical analysis shared by popular cryptocurrency trader Daink, this will push Ether price to $4,000 before the end of the year. He wrote in an X post on October 17:
“The all-time high will come in the first quarter of 2025, but for now I like $4,000.”
ETH/USDT, 1-day chart. Source: Dyink
Despite optimistic forecasts, Ethereum remains in a seven-month downward trend, down more than 36% from its annual high of $4,111 in March 2024.
According to anonymous cryptocurrency analyst Ignas, the price decline may be due to Ethereum losing ground in the race for layer 1 (L1) blockchain innovation.
relevant: Ethereum price crashes often occur after peaks in ETH open interest. Will history repeat itself?
A selloff to $2,400 could occur first.
Not all traders are optimistic about the short-term trajectory of Ether price.
According to cryptocurrency trader Justin Bennet, technical patterns on the 1-hour chart suggest that ETH could correct towards $2,400.
In an October 17 X post, Bennet wrote:
“Although it is not a pattern I trade, $ETH may form a diamond reversal pattern. If we find it close to support, our target is $2,485.”
ETH/USD, 1-hour chart. Source: Justin Bennett
Ether’s Relative Strength Index (RSI) also suggests a potential correction. On the daily chart, Ether’s RSI is at 59, above its 14-day average of 50.
The last time Ether’s RSI rose to 60, ETH price had seen a six-day correction, with Ether bottoming out at $2,309 on October 24, with an RSI of 39, according to Coinbase data.
ETH/USD, 1-day chart, RSI. Source: TradingView
RSI is a popular momentum indicator used to measure whether an asset is oversold or overbought based on the magnitude of recent price changes.
relevant: In October, two builders produced 88% of Ethereum blocks, raising concerns.