Ethereum (ETH) took a bit of a tumble earlier this week, dipping below $3,000 for the first time since November. But don’t worry, some experts think this is actually good news!
Ethereum’s Recent Price Action
The price drop came after a weekend where ETH hovered around $3,200-$3,340. Analyst Ali Martinez pointed out key support and resistance levels based on where large numbers of addresses had previously bought ETH. While ETH initially bounced off the key support, it briefly fell below it on Monday, hitting $2,920 before quickly recovering.
A Bullish Outlook?
Crypto investor Miky Bull sees this recent dip as a “perfect setup” for a major price increase. He’s looking at a chart pattern called an “inverse head and shoulders,” which often signals a bullish reversal. This pattern, also noted by other analysts like Rekt Capital, could potentially send ETH soaring to $7,000, according to Bull.
Echoes of 2021
Analyst Crypto Bullet noticed a similarity between ETH’s current chart and its performance in 2021. Back then, ETH also fell below a key support level after forming a “double top” pattern, but it quickly recovered and went on to hit its all-time high. This historical parallel has some believing a similar scenario could play out now.
Historical Trends and Seasonality
Another analyst, Daan Crypto Traders, highlighted ETH’s strong performance in the early weeks of the year in the past. While early 2024 saw some negative weekly returns, a positive trend emerged as February approached. Daan cautions investors to consider quarterly returns for a more accurate picture of seasonal trends.
The Bottom Line
At the time of writing, ETH is trading above $3,200, showing a quick recovery. While short-term price fluctuations are normal, several analysts are optimistic about Ethereum’s potential for significant growth in the coming months.
