Analyst Identifies Triple-Bottom Pattern, Ethereum Price Eyes Breakout

Ethereum (ETH) price has formed a triple bottom pattern which is a technical pattern that is considered a buy signal.

Market analyst TedPillows has broken down this situation. As per his analysis, ETH has bounced off key supports, and it could be building up to the all-time highs.

Triple-Bottom Formation Suggests Bullish Reversal for Ethereum Price

The triple-bottom pattern is used to identify an asset that tests or pulls up or down to the same support level for three times without piercing through the level, thus indicating the demand from buyers.

Ethereum price has had solid support around the $2,160 level which did not let the cryptocurrency break down further.

This makes the probabilities of an upward breakout to be high as selling pressure appears to be eased.

This has been evidenced by several testing events of the price at $4,092. It has met rejection in multiple instances at this level.

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Should Ethereum begin to rise above this level, it is likely to indicate that the positive trend toward $4,817 is set to resume where it left off.

The level indicates that if the buyer’s control is regained, ETH could experience another uptrend. This could change this bearish outlook.

Ethereum Price Approaches Critical Resistance Zone

At the time of writing, Ethereum was trading at $2,708.90, which is a 0.70% rise in a day and a 3.94% rise in a week.

The price has formed a bullish pennant, continuation pattern usually observed prior to an upside breakout.

The pennant’s resistance level near $2,700 is a crucial area for traders to watch. A break above this level could confirm a larger Ethereum price rally.

The support trendline within the pennant has remained intact, suggesting that buyers are actively defending lower levels.

For Ethereum clearing the $2,700 resistance with strong volume, can trigger a move toward $3,200, aligning with previous resistance zones.

Momentum Indicators Support Potential Breakout

The Relative Strength Index (RSI) stands at 53.52, which is above the midline. This means it could pose strength in the bulls to push the price through the breakout.

For the other indicators, the Moving Average Convergence Divergence (MACD) indicates a weak bullish formation at the primary level.

It shows that bears’ pressure is being waned and leaves positive signs on the histogram signaling that the bearish pressure is likely to reverse.

If this bullish crossover persists, it would serve to support the Ethereum price breakout.

Declining Exchange Reserves Indicate Strong Holding Sentiment

According to data from CryptoQuant, exchange reserves continue to decrease to the level of 18.9 million of ETH.

This is down considerably from over 30 million ETH way back in the beginning of last year.

The reduced on-exchange supply shows that ETH is being accumulated from the exchanges and holds for the longer term and the selling pressure has declined and consequently supply squeeze may occur.

Historically, Ethereum’s price has shown an inverse correlation with exchange reserves—as reserves drop, prices tend to rise due to limited market supply.

While ETH has seen some price corrections, the continued decrease in exchange reserves suggests strong accumulation and a possible price surge in the coming months.