Ethereum's Bullish Breakout: 20% Price Rally Ahead

Ethereum (ETH) Breakout Signals Potential 20% Price Rally

Ethereum (ETH), the world's second-largest cryptocurrency by market capitalization, is poised for a significant price rally following a bullish breakout on the daily timeframe. Despite recent market volatility, the price action suggests a shift in sentiment from a downtrend to an uptrend.

Technical analysis indicates that Ethereum has broken out of a bullish falling wedge pattern that it has been forming since November 2024. Following this breakout, sentiment has shifted, and the price momentum suggests a potential 20% increase to reach the $4,100 level. Currently, Ethereum is facing modest resistance at $3,400, which could play a crucial role in its future gains.

The Relative Strength Index (RSI) is at 55, indicating that Ethereum has enough strength to sustain its upside momentum. However, on-chain metrics reveal mixed sentiment, with long-term holders and investors reportedly dumping their assets, according to on-chain analytics firm CoinGlass. Data from spot inflows/outflows shows a significant inflow of $103 million worth of Ethereum to exchanges, suggesting potential selling pressure.

Despite the mixed sentiment, traders have been betting strongly on the long side, indicating a bullish outlook. At press time, the major liquidation areas are $3,305 on the lower side, where bulls are over-leveraged and hold $360 million worth of long positions. Conversely, $3,370 is the level where short sellers seem to be over-leveraged, holding $190 million worth of short positions.

Ethereum is currently trading near $3,350 and has experienced a price surge of over 1.50% in the past 24 hours. During the same period, its trading volume jumped by 10%, indicating heightened participation from traders and investors, potentially driven by the recent breakout.