To The Moon

We are seeing significant discussion and technical analysis suggesting that a "cup and handle" pattern has formed on Ethereum's (ETH) charts, and if confirmed, this could indeed push its price towards the $4,000 mark and potentially higher.

Here is a breakdown of the analysis and why I am trying to assess it as a point of interest

Understanding the Cup and Handle Pattern

The cup and handle is a bullish continuation pattern in technical analysis, first identified by William J. O'Neil. It suggests that an upward trend will resume after a period of consolidation.

The "Cup": This is a rounded bottom formation, resembling a "U" shape, indicating a period of consolidation after a price decline, followed by a recovery back to the original high. A longer, more "U"-shaped cup is generally considered more reliable.

The "Handle": This is a smaller, usually downward-sloping or sideways consolidation that forms on the right side of the cup, typically within the top half of the cup's depth. It represents a brief pause or slight pullback before the breakout.

The Breakout: The bullish signal is confirmed when the price breaks above the resistance level formed by the top of the handle (often the previous high of the cup).

Why analysts believe ETH is forming this pattern and its potential implications

Recent Price Action: Several sources indicate that ETH's price action since February (and possibly extending into May) has formed a "cup" with a rounding bottom, followed by a "handle" consolidating at higher levels.

Target Price Calculation: Technical analysts typically project the target price of a cup and handle by measuring the depth of the cup and adding it to the breakout point (the top of the handle/neckline). Based on recent analysis, this calculation often points to targets around $4,000 to $4,100, and some even suggest up to $5,925 by year-end 2025 if broader market conditions are favorable.

Supporting Indicators:

Increased Daily Transaction Volumes: Ethereum's daily transaction volumes hit a yearly record in late May, indicating increased network activity.

We can see a very nice upward movement of the daily transactions for Ethereum.

Pectra Upgrade: The successful Pectra upgrade is noted for improving the network's scalability, reducing transaction costs for Layer-2 solutions, and making ETH more deflationary by burning a portion of transaction fees. This fundamental improvement can drive demand.

Inflows into ETH Products: Ethereum investment products have seen significant inflows, especially from US spot Ethereum Exchange-Traded Funds (ETFs), with hundreds of millions of dollars flowing in. This institutional interest is a major bullish driver.

SEC Clarity on Staking: Recent statements from the SEC clarifying that certain staking activities do not fall under securities laws have boosted interest in ETH and could pave the way for staking within Ethereum ETFs.

Golden Cross: The 50-day and 100-day Exponential Moving Averages (EMAs) forming a "golden cross" is another bullish technical signal.

On top of the golden cross formed recently for ETH, we are seeing positive momentum continued on the daily chart, and though there is a consolidating of the prices, I believe we should be seeing a strength push coming.

Whale Accumulation: Reports of significant ETH purchases by large investors ("whales") suggest strong confidence.

Caveats and Risks

Confirmation is Key: The pattern is only confirmed upon a decisive breakout above the neckline of the handle. Traders often wait for a sustained close above this resistance level, often with increased volume, before entering positions.

RSI Divergence: Some analyses note a hidden bearish divergence in the Relative Strength Index (RSI), suggesting weakening momentum beneath the surface. This could lead to short-term pullbacks or consolidation even within a broader bullish structure.

Key Support Levels: The 200-day EMA and other Fibonacci levels are crucial support zones. A break below these levels could invalidate the bullish pattern.

Market Sentiment and Macro Factors: While current sentiment around ETH is largely positive due to ETF approvals and network upgrades, the broader crypto market and macroeconomic conditions (like interest rates, inflation, and global tensions) can always influence price action.

Volatility: Cryptocurrencies, including ETH, are inherently volatile. Price predictions based on technical patterns are not guarantees.

Crypto Stocks On Potential Uptrend (Coming)

$Core Scientific, Inc.(CORZ)$

We are seeing continued positive momentum for CORZ, and trading above the 50-day and 100-day, we should be seeing the bulls making a daily uptrend expansions, though long-term it might be affected by the Bitcoin price movement.

$IREN Ltd(IREN)$

We are seeing a positive momentum and it is also trading above the 50-day and 100-day making the bulls attempting to make a daily uptrend continuation, and we should be seeing this stocks continue to push if ETh trying for $4,000.

Bitcoin would need to reclaim the $106,000 level and this stock should have a pretty strong run.

Summary

Based on the prevalence of the "cup and handle" pattern observation and supporting fundamental and technical factors, there is a strong technical case for Ethereum's price to push towards and potentially surpass $4,000. The recent positive developments regarding ETF approvals and network upgrades add fundamental weight to this technical outlook.

However, as with all technical analysis, confirmation of the breakout is essential, and vigilance regarding support levels and broader market conditions is advised.

Appreciate if you could share your thoughts in the comment section whether you think Ethereum rise could also help to push crypto stocks on the uptrend.

@TigerStars @Daily_Discussion @Tiger_Earnings @TigerWire appreciate if you could feature this article so that fellow tiger would benefit from my investing and trading thoughts.

Disclaimer: The analysis and result presented does not recommend or suggest any investing in the said stock. This is purely for Analysis.