Ethereum (ETH) is flashing a powerful confluence of technical and on-chain signals, with analysts pointing to a 2017-style bullish setup that could ignite a major breakout toward $8,000.
After months of consolidation, Ethereum is showing renewed strength across derivatives and spot markets. The recent decline in open interest, coupled with a textbook bullish pennant formation, has revived bullish sentiment among traders who believe the second-largest cryptocurrency may be entering its next macro uptrend phase.
Ethereum’s Open Interest Reset Points to Healthier Market Structure
Ethereum (ETH) is showing renewed signs of strength as market speculation cools. According to on-chain data, Ethereum’s aggregated open interest (OI) has fallen sharply—down roughly 37% from a $30 billion peak to around $19 billion—while the ETH price has only retraced about 20% from its $4,000 high.
ETH open interest drops 45% while price is only down 20%, setting the stage for a potential $5,500–$6,000 rally. Source: @TedPillows via X
Crypto analyst @TedPillows described the trend as “a very bullish thing,” explaining that reduced leverage “means speculation is now very low,” creating room for Ethereum to rally toward $5,500–$6,000 without the market becoming overheated.
The decline in OI suggests that leveraged traders have exited their positions, leaving spot buyers and long-term holders in control. Historically, such resets have preceded 50–100% Ethereum rallies, as liquidation risks decline and price action stabilizes.
Technical Outlook: A 2017-Style Bullish Pennant Formation
Ethereum’s monthly chart appears to be shaping a bullish pennant, a classic continuation pattern that often precedes major breakouts. Technical analyst Merlijn The Trader called it “the most explosive setup since 2017,” emphasizing that “cycles don’t lie—Ethereum is ready to rewrite history.”
Ethereum forms a textbook monthly bullish pennant—the most explosive setup since 2017, signaling $ETH could rewrite history. Source: @MerlijnTrader via X
The structure, formed by converging trendlines since Ethereum’s 2021 all-time high, mirrors the consolidation seen before the 2017 breakout that sent ETH soaring from $10 to over $1,400. Based on the pattern’s flagpole projection, analysts suggest a potential upside target of around $8,000, assuming a clean breakout above the upper resistance band.
Ethereum’s current consolidation near $3,900–$4,100 aligns with key technical levels observed during prior cycle reversals. Traders are closely watching whether ETH can close above $4,200, a resistance level that has capped upside attempts in recent weeks.
Cycle Patterns Reinforce Long-Term Bullish Structure
Market cycles remain central to Ethereum’s narrative. Analyst @EtherNasyonaL highlighted that in each of Ethereum’s past two bull markets, the asset revisited a major demand zone before entering a parabolic phase.
Ethereum revisits its major demand zone, repeating past cycle patterns, as many investors miss the potential parabolic move. Source: @EtherNasyonaL via X
“In the first and second cycles, Ethereum tested the major demand zone before going parabolic,” the analyst said, noting that the same setup appears to be forming again around the $2,000–$3,000 region.
This cyclical behavior suggests ETH is once again preparing for an extended upward leg. The similarity between previous retests and the current structure adds weight to the bullish thesis, supported by strong ETF inflows projected at $2–3 billion by Q4 2025 and ongoing institutional accumulation.
Looking Ahead: A Clean Slate for Ethereum’s Next Major Move
Ethereum’s technical and derivative metrics are increasingly aligning toward a potential macro breakout. The contraction in open interest and the formation of a textbook pennant pattern both signal a healthier foundation for price expansion.
Ethereum (ETH) was trading at around $4,035, up 3.37% in the last 24 hours at press time. Source: Ethereum Price via Brave New Coin
With reduced speculation, robust institutional interest, and historical cycle alignment, Ethereum’s path toward the $8,000 zone looks increasingly credible—though the market will require sustained spot demand and broader crypto resilience to confirm the move.
As traders await further confirmation, Ethereum remains the focus of bullish attention, with long-term holders seeing the current setup as an opportunity rather than a risk.