Ethereum (ETH) has experienced a significant correction of over 10% from its New Year highs as the market retraces, dropping below the $3,300 support level. Despite this pullback, many analysts remain optimistic about ETH’s performance in the first quarter of the year, anticipating that new highs are on the horizon.
The recent market retrace saw Ethereum fall below the $3,320 mark, leading to a 14% decline from its Monday high of $3,744 to below the $3,300 support level. However, during the start-of-year rally, ETH managed to recover 20% from its correction lows, reaching pre-retrace levels for the first time in almost three weeks. The market pullback, which also affected Bitcoin with a 7.2% drop in 24 hours, pushed Ethereum down to the $3,210 level on Thursday morning. Throughout December, the $3,200-$3,300 price range had served as a crucial support zone for ETH.
Despite the recent downturn, several analysts have pointed out that Ethereum is forming an important reversal pattern, hinting at a potential surge to new highs. One analyst, Rekt Capital, highlighted that Ethereum is forming a multi-month inverse Head and Shoulders pattern in the 1M timeframe. According to the analyst, there is a significant resistance zone between $3,650-$3,760 developing just below $4,000, with the price forming a lower high that could act as a neckline to the pattern.
Additionally, other analysts like Miky Bull have also identified the same pattern, suggesting that ETH could target $7,000 in the near future. However, it is crucial to note that the bullish pattern would be invalidated if Ethereum drops below $2,800, where the left shoulder of the pattern formed.
Looking ahead, analysts like Crypto Wolf believe that there is minimal downside left for Ethereum, with a possible retracement of 4% to 7% before aiming for all-time high levels. Currently, ETH is trading at $3,255, reflecting a 2.15% decrease in the daily timeframe.
In conclusion, despite the recent market correction, analysts remain optimistic about Ethereum’s potential for new highs in the near future. The formation of bullish patterns and the resilience of key support levels indicate a positive outlook for ETH’s performance in the first quarter of the year.