Ethereum (ETH) has experienced a noteworthy 4.7% recovery in the past 24 hours, reclaiming a crucial support zone. This surge in performance has sparked optimism among some analysts, who believe that the cryptocurrency may soon break above a key resistance level.
A week ago, Ethereum surged above $4,000 for the first time in nine months, approaching its previous high and the much-anticipated $4,100 resistance level. However, the rally was briefly halted following a significant pullback in the crypto market.
Earlier this week, ETH retraced nearly 10%, dropping below the $3,500 mark as Bitcoin also retraced to $95,000. However, the second-largest cryptocurrency by market capitalization has been steadily climbing back up, regaining the $3,800 support zone on Wednesday.
Subsequently, ETH’s price increased by another 2% in the early hours of Thursday, pushing above the $3,900 level once again. Analyst Carl Runefelt noted that Ethereum was trading above its ascending support trendline, which had been lost during the market correction. Additionally, the cryptocurrency was retesting a six-day downtrend line in the 4-hour chart, with a potential breakout targeting a surge towards $4,000 after surpassing the $3,940 mark.
Following this breakout, Ethereum reached a daily high of $3,985 before retracing to $3,945. Analysts suggest that maintaining support above this level could propel ETH’s price towards $4,100 in the near future.
Despite reclaiming the $3,900 zone, Ethereum still needs to successfully turn another multi-year resistance into support. Analyst Alex Clay pointed out that ETH has been testing the $9,350 level since 2021 without successfully converting it into support. Ethereum has faced rejection at this resistance level on multiple occasions, but when it managed to break and hold this level, it surged towards its all-time high of $4,878 three years ago.
Crypto analyst Jelle indicated that Ethereum is gearing up for significant movements after breaking out of a multi-year pennant pattern. ETH-based Exchange-traded funds (ETFs) have witnessed a significant increase in inflows, signaling growing demand from institutional investors and adding to the cryptocurrency’s momentum.
Moreover, the Donald Trump-backed DeFi project World Liberty Financial Initiative (WLFI) recently acquired around $10 million in ETH. This move has been interpreted as a signal of institutional approval for Ethereum. If Ethereum successfully turns the $3,950 resistance into support, analysts believe that there will be minimal obstacles preventing new all-time highs, with a potential target of $5,000 in the near future.
As of the latest data, ETH is trading at $3,951, reflecting a 4.7% increase in the daily timeframe. The chart above illustrates Ethereum’s performance in the one-week chart.
In conclusion, Ethereum’s recent recovery and positive sentiment in the market have set the stage for potential further gains and a possible breakthrough to new all-time highs in the coming days.