Ethereum Forms Megaphone Bottom, Sparking Bullish Predictions

Ethereum's price has recently formed a megaphone bottom, a pattern not seen since 2020. This development has sparked interest among analysts who are drawing parallels to the market conditions of March 2020. The current price action of Ethereum, which has been bearish since late December, is reminiscent of the period following the COVID crash. The megaphone bottom pattern suggests a potential upward breakout, similar to what was observed in the June 2019 to March 2020 period.

Analysts have noted that Ethereum is currently on the first week of a rebound after experiencing three consecutive red weeks, during which it failed to break above the 1-week moving average. This trendline is technically the bottom of a 1-year megaphone pattern that began with the high on March 11, 2024. The alignment of Fibonacci retracement levels further supports the bullish outlook, with predictions that Ethereum could test the 1.5 Fibonacci extension at $6,000 before the cycle tops at the end of the year.

Crypto analyst Crypto Patel has also suggested that Ethereum could rally to as high as $8,000 during phase E of its bull run. However, he cautioned that significant resistance could be encountered around $4,050. Despite its recent underperformance, Ethereum's fundamentals remain bullish. The declining exchange reserves of ETH indicate a limited supply, which could drive the price higher. Additionally, whales have been actively accumulating ETH, with 360,000 ETH withdrawn from exchanges in the last 48 hours, potentially sparking a supply shock.

The approval of Ethereum ETFs could further reduce the circulating supply of ETH, as institutional investors may opt to stake their holdings to receive yields. This development, along with the current bullish fundamentals, suggests that Ethereum is still in the early phases of its bull run. At the time of writing, Ethereum is trading at around $1,969, reflecting a slight decline in the last 24 hours.