Seasoned Analyst Says Ethereum $6K Rally Likely as Key Support at $2,400 Holds

Analyst Ali Martinez identifies $2,400 as a crucial support level for Ethereum, suggesting a potential rally toward $6,000 as the crypto retests this key zone.

Ethereum has been trending within an ascending channel since July 2023. Recent price action saw Ethereum moving toward the lower edge of this channel. As of October 26, the crypto retested the lower trendline of this channel.

The current price level near $2,400 serves as a significant support zone, according to analyst Ali Martinez. He stressed that a bounce from this point could set the stage for an upward movement toward the upper boundary, estimated around $6,000.

#Ethereum is testing a key support zone at $2,400. If this level holds, we might see $ETH aiming for the channel’s upper boundary near $6,000! pic.twitter.com/W8J8WVy5CL

— Ali (@ali_charts) October 26, 2024

Ethereum’s Ascending Channel 

The ascending channel pattern, characterized by two parallel trendlines, indicates clear resistance and support zones, guiding Ethereum’s price action. The upper boundary serves as resistance, while the lower boundary provides support. Ethereum’s approach to the lower boundary around the $2,400 level signifies an essential support retest. 

In response to Martinez’s bullish sentiment about Ethereum, a commenter argued that the price could break down from the support level rather than ascend to the upper resistance. However, Martinez countered that a strong risk-to-reward ratio exists if stops are set between $2,300 and $2,150.

At press time, Ethereum is recovering from recent losses, trading at $2,507.68. This represents a 1.65% rise in the past 24 hours despite a 7.61% drop over the last week.

Reduced Selling Pressure?

Further analysis of IntoTheBlock’s data highlights on-chain metrics that suggest a bullish sentiment for Ethereum. The data indicates that 70.34% of Ethereum addresses are currently in profit, while a mere 1.74% are at break-even, and over 27% are in losses. 

This imbalance typically reduces selling pressure since fewer holders are inclined to sell at the current price levels. With the majority of holders in profit and minimal break-even positions, market conditions appear supportive of a continuation within the ascending channel.

Elsewhere, in response to community concerns about Ethereum Foundation’s periodic ETH sales, co-founder Vitalik Buterin clarified the rationale behind these actions. According to Buterin, proceeds from the sales fund core development projects, such as reducing transaction times, lowering transaction fees through EIP-1559, and transitioning Ethereum away from Proof of Work to preserve token value. 

Additionally, Buterin addressed why the Foundation avoids staking all its ETH holdings, citing the need to remain impartial during contentious hard forks. The Foundation is considering alternative approaches, such as delegating staking to third parties while maintaining ethical oversight. This strategy aims to distribute Ethereum’s legitimacy across multiple organizations, enhancing ecosystem stability.