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Ethereum (ETH) is about to break out of a key resistance area as Bitcoin finally soars past its long-awaited $100,000 target. The second-largest cryptocurrency rally has fueled optimism about the target, with some suggesting it could emulate BTC’s 2020-2021 rally.
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Ethereum Reclaims $3,900
Ethereum, the second-largest cryptocurrency by market capitalization, surged 10% last week, moving from $3,500 to $3,900 resistance. On Wednesday, the king of altcoins broke above the $3,800 level for the first time in six months and continued its rise to retest the $3,900 resistance not seen since early March.
In the early hours of Thursday, ETH turned this key area into support, briefly falling to $3,860 before jumping back to recently recovered levels. As the cryptocurrency approaches its yearly high of $4,093, sentiment regarding the token’s near-term performance has turned extremely optimistic.
Ethereum is retesting a large multi-year resistance area that could send ETH to a new ATH. According to analyst Alex Clay, the cryptocurrency is attempting to “break through key resistance areas on a weekly basis.”
ETH has broken the key zone five times since 2021 and has been rejected above the upper resistance level of $3,950 on four previous occasions. However, Ethereum surpassed this level in late 2021, reaching an all-time high (ATH) and remaining above it for almost three months.
The analyst pointed out that if the king of altcoins successfully breaks this level and turns it into support, it will “break through” next and shatter ATH. “I don’t see any major declines in the near term,” Clay added.
Likewise, cryptocurrency analyst Jelle said “all bets are off” if Ethereum surpasses its March highs, adding that it is “very unlikely” that ETH will have a long consolidation period before a new ATH like BTC emerges. said.
Is ETH rallying towards $10,000?
Jelle also noted that Ethereum’s current setup mimics Bitcoin’s in July 2020. According to the chart, Bitcoin broke a multi-year downtrend line by mid-2020 before staging a massive 500% 10-month rally towards $60,000 in April 2021.
The analyst noted that ETH violated a multi-year trendline today, just like BTC did in 2020, which could trigger a similar rally towards new highs in the coming months. He added that investors would be “very happy if this leads to similar results.”
In another post, he highlighted that Ethereum began its rally when Bitcoin broke its ATH and entered price discovery when BTC was trading almost 100% above its previous cycle high.
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He thinks, “I would be surprised to see things play out similarly this time around.” BTC and ETH rose simultaneously, with ETH entering price discovery around ±$130,000.”
Based on this, the analyst believes that a 150-200% rally towards the $10,000-$12,000 price range of the cryptocurrency is possible during this cycle. As of this writing, ETH is trading at $3,905, up 2.4% over daily trading hours.
Featured image from Unsplash.com, chart from TradingView.com