The original Ethereum token, Ether (ETH), could reach over $10,000 in the coming weeks as it charts what appears to be an “ascending triangle” technical pattern.
Ether price specification: bullish
Ascending triangles are bullish continuation patterns that appear during a trend. Analysts confirm their presence after the price surged inside the ascending rectangular triangular structure, forming a series of lower highs on the lower trend line with resistance at the upper level. As the style develops, the sizes usually decrease.
So far, Ether has formed a similar bullish trend pattern on the weekly chart. In more detail, the lower trendline of the triangle has been acting as an accumulation area since early 2021 with selling pressure rising on the upper trendline as shown below.
ETH/USD weekly price chart in an ascending triangle pattern. Source: Wolf, TradingView
The basic principle of ascending triangle patterns is that they can lead to a significant increase in price, with the maximum distance between the upper and lower trendlines measured from the breakout level.
Using the same feature as Ether’s up channel, Ether could see a decisive boom for $10,000. On the higher time frame, another technical pattern is drawing an upward target at $4,000.
Wolff, an independent market analyst, predicted that Ethereum will recover in the upcoming sessions, followed by an extended recovery due to the possibility of a head and shoulders reversal.
Is ETH price a bull trap?
An ascending triangle appears as Ethereum maintains gains near the bottom around $2,150 in January 2022. Consequently, the ETH/USD exchange rate is up more than 25% in less than four weeks.
But some analysts see the continued rally in the Ethereum market as a bull trap, a reversal that could force traders on the wrong side of price action to liquidate their positions at unexpected losses. One of them is TheTreeTrader, formerly known as TT, a market commentator based on TradingView.
Related: This bullish Ethereum options trade targets the $3.1K price of ETH with no liquidation risk.
Ignoring the ascending triangle of ether, TT focused on the descending trend line that has served as resistance since November 2021.
However, with ETH trading below the specified price limit, momentum indicators, especially the Relative Strength Index (RSI), Average Convergence Divergence (MACD), and the Stochastic Relative Strength Index (RSI) tend to rise.
ETH/USD daily price chart. Source: TradingView / TT
As a result, ETH has confirmed a bearish divergence between price and momentum, a pattern that usually leads to a price reversal. If such a move occurs, TT notes that the price of Ether could drop to $2,300.
Conversely, a successful breakout of a downtrend line resistance is likely to turn the Ethereum market bullish, TT wrote.
There are still concerns about the Aether trap as well due to it plotting technical charts with an upward bias but it still failed to break.
For example, Ether proposed a similar channel pattern to form in October 2021, Cointelegraph reported, with a breakout target of around $6,500 at a current price of around $3,750. However, after a few weeks, the Ethereum token dropped to $2100, invalidating the classic bullish continuation setup.
Ethereum network growth
Despite conflicting opinions, Ethereum online surveys paint an optimistic picture.
For example, in 2021, Ethereum attracted about 18.36 million new addresses to its network at a rate of 1.53 million per month, reflecting strong user growth.
The number of Ethereum addresses with a non-zero balance. Source: glassnode
Meanwhile, data from Glassnode showed that the number of Ethereum addresses holding at least 1 ETH hit an all-time high in early February, reaching 1.42 million on the 9th of the month.
In addition, the number of addresses and non-zero addresses with at least 0.1 ETH rose to a new high on February 15, reaching nearly 75 million and 7 million respectively.