Ever since the completion of Bitcoin’s fourth halving, Ethereum (ETH) has been experiencing a steady recovery, as evidenced by the formation of new high-low patterns on daily charts. So, what is the current situation on Ethereum, the leading platform for smart contracts? What do the latest data indicate?
Short-Term Analysis of Ethereum
While the overall growth of the cryptocurrency market remains limited, Ethereum’s price has managed to increase by 17%, going from $2,870 to $3,335. A closer look at the daily chart reveals that the price of ETH is approaching a critical point, with the formation of a falling wedge pattern. Based on the price movement within the downward trend line of the falling wedge, the short-term outlook for Ethereum suggests a downtrend.
However, it is worth noting that this chart setup is known for gathering bullish momentum and sustaining dominant rallies. With a 2.16% intraday gain, the ETH price is showing an upward trend from the weekly resistance level of $3,280. This breakout is encouraging buyers to once again challenge the resistance trend line of the formation.
Analytical Reports on ETH
According to on-chain data analyzed by Lookonchain, prominent investor James Fickel has been actively accumulating Ethereum (ETH) while maintaining his long position in the ETH/BTC trading pair. Lookonchain’s tracking reveals that Fickel borrowed approximately $119.75 million worth of 2,301 Wrapped Bitcoin (WBTC) from the decentralized finance platform Aave.
On January 10, this borrowed WBTC was then traded for 41,947 ETH at an exchange rate of 0.055, coinciding with the launch of a Bitcoin ETF. Additionally, Fickel has allocated $35 million USDC to purchase 10,952 ETH at a price of $3,196 each over the past three days. This significant investment could indicate a bullish trend towards Ethereum, with a higher potential for breaking the wedge pattern. If the indicated potential breakout occurs, it would signal the end of the previous correction and could enable the price to reclaim values above $4,000.
Disclaimer:
The information presented in this article should not be considered as investment advice. Investors should be aware that cryptocurrencies are highly volatile and carry inherent risks, and should therefore conduct their own research before making any investment decisions.
