Ethereum holds above $2,400 with a potential breakout at $2,700, aiming for a 50% rally toward the $4,000 mark.
As Bitcoin rises 1% to record a new all-time high, Ethereum outperforms with a 3% surge and is currently trading at $2,632. The leading altcoin is forming a rounding bottom pattern, hinting at a potential breakout and a 50% rally ahead.
Ethereum Price Analysis
On the daily chart, Ethereum has maintained a sideways trend between $2,400 and $2,700 over the past week. However, the short-term consolidation remains above the 200-day EMA at $2,443, indicating underlying strength.
In the broader picture, Ethereum appears to be completing a rounding bottom pattern, with the neckline aligned with the 50% Fibonacci retracement level near $2,700. A breakout above this neckline could trigger a 50% rally.
This potential rally is calculated by adding the depth of the pattern to the breakout point. Based on Fibonacci analysis, the upside target aligns with the 100% Fibonacci level near $4,000.
Supporting this bullish scenario, the RSI has spiked into the overbought zone, reflecting growing bullish momentum. Additionally, the 50- and 100-day EMAs are approaching a bullish crossover, reinforcing the upward outlook.
On the downside, a breakdown below the 200-day EMA would invalidate the bullish setup and could push Ethereum down to the 50-day EMA near $2,154.
Rising Optimism Boosts Ethereum Derivatives
As Ethereum approaches a potential breakout, the derivatives market reflects rising bullish sentiment. Open interest has surged nearly 20%, reaching $32.44 billion, indicating growing trader participation.
Ethereum Derivatives
This bullish sentiment is further confirmed by a positive funding rate of 0.0041% and $32 million in short liquidations over the past 12 hours, compared to just $10 million in long liquidations. According to CoinGlass data, this reflects a bullish narrative that could fuel a leverage-driven rally.
Analyst Targets $3,000 With Bullish Pattern Breakout
Crypto analyst Ali Martinez shares an optimistic post on the Ethereum price rally, targeting a potential surge towards $3,000. The analyst highlights a breakout of an inverted head-and-shoulders pattern in the hourly time frame.
If #Ethereum $ETH breaks above the $2,588 resistance, it could trigger a bullish move toward $3,000. pic.twitter.com/yRrHAoyhnk
— Ali (@ali_charts) May 21, 2025
Martinez expects a move above the 1.78 Fibonacci level, with the $3,000 mark as a likely target. However, Ethereum must maintain support above the $2,585 neckline to confirm and sustain this bullish breakout.
