Ethereum’s price action has caught the attention of investors and analysts alike, as it is trading near a critical support level at… $2600. Analyst Ali Martinez has identified this area as the critical threshold that Ethereum will cross before making its next important move.
If this support continues, according to Martinez, it will serve as a catalyst in organizing a rally to guide the cryptocurrency to the ambitious target of $6,000. However, things do not appear to be going well, with some market watchers and participants already seeing that the current support may collapse under the pressure.
#Ethereum It is testing a key support area at $2,400. If this level holds, we may see… $ Ethereum Aim to reach the upper limit of the channel near $6,000! pic.twitter.com/W8J8WVy5CL
– Ali (@ali_charts) October 26, 2024
Ethereum has started forming an upward channel as of July 2023. An upward channel is a technical pattern in which two parallel trend lines represent support and resistance levels. Recently, Ethereum price has remained near the lower edge of this corridor. Martinez believes Ethereum will rise from here, so everyone is holding on tight.
Important support and resistance areas
An ascending channel pattern does not happen by chance. It indicates potential paths for Ethereum. The trend line acts as a resistance level in the channel, while the trend line below acts as a support level for the price to bounce. Ethereum’s move past $2,600 is also an important retest point that will serve as a pivot for a new price target.
Martinez believes this is a good risk-reward opportunity for the investor and recommends placing stops at around $2.00 to $2,150. The idea behind these stop losses is to limit potential losses, but it also opens an uptrend in case Ethereum moves higher towards the upper trend line.
This observation seems somewhat ambiguous, with some analysts expressing concerns about a potential breakout at the $2,500 range. However, Martinez did not offer much insight into how this situation could create favorable conditions for a rally to occur.
The indicators look positive: on-chain data
On-chain data shows that 70% of Ethereum holders are profitable. Therefore, this positive attitude will be further supported in terms of a level of profitability that reduces the chances of large sellers. When there are no strong selling motives, an upward movement for Ethereum can easily be expected.
Strong long-term outlook
Meanwhile, Ethereum’s future estimates have room to grow. Current market forecasts reveal that Ethereum is trading approximately 6.5% below the expected target for next month, which also means that the asset’s price is undervalued.
More positive long-term forecasts range from 173% potential returns Within a year, according to CoinCheckup figures. This growth will likely give a boost to Ethereum’s upward movement and form a more stable support base that may encourage price levels to remain high and stable.
Featured image from StormGain, chart from TradingView