Ethereum’s native token, Ether (ETH), is just “seconds” away from a convincing breakout phase, in response to analyst Kamran Asghar.
Key insights:
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Ethereum is poised to interrupt out of a falling wedge, with a goal of $4,400.
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A bullish crossover in Ethe’s MACD indicator supports the short-term bullish outlook.
ETH price could rise above $4,400 by mid-December
On Wednesday, ETH drew a textbook falling wedge structure while its Moving Average Convergence Divergence (MACD) indicator signaled a bull cross.
The falling wedge typically indicates that bearish momentum is weakening. In the case of Ether, the structure has been developing since early October and is now approaching a breakout point near $3,560, which also coincides with the 0.236 Fibonacci retracement level.
ETH/USDT four-hour chart. Source: TradingView
A decisive move above this resistance could confirm a breakout and set the stage for a rally towards $4,415 by mid-December, about 25% above current levels.
The goal corresponds to the 0.786 Fib level, which previously acted as a key resistance zone.
To emphasize the bullish outlook, Asghar emphasized that Ethereum's MACD, a momentum indicator, is “just seconds” away from completing a bullish crossover.
The MACD compares two moving averages to discover shifts in trend strength. When the faster blue line crosses the slower orange line, it indicates that purchasing pressure is exceeding selling momentum.
Historically, similar MACD flips during consolidation phases have preceded each short- and long-term ETH rallies.
What could change the bullish view?
However, a pullback from the upper trendline of the wedge risks invalidating the breakout setup and as a substitute pushing ETH price towards the lower trendline, roughly within the $3,000-$3,200 range.
In a worst-case scenario, price could consolidate until it reaches the apex of the wedge, where its two trendlines converge at around $2,710.
Ethereum's MVRV extreme divergence price bands point to a bearish outlook, suggesting that ETH could slide towards its -0.5σ band (teal) at around $2,870 after closing below its average valuation level.
Throughout Ether's history, similar dips below the mid-band have preceded prolonged sell-offs, often pushing ETH's price to or below the Teal 0.5σ band before a recovery began.
This article doesn’t contain any investment advice or recommendations. Every investment and trading activity involves risks and readers should conduct their very own research when making their decision.
