Key Takeaways: Ethereum is forming a bull flag on the daily chart, with a potential breakout above $3,600. If ETH reclaims the 2-week Gaussian Channel mid-line, a 90% rally could occur. Ethereum (ETH) price is consolidating between $2,400 and $2,750 on its daily chart, forming a bull flag pattern with sights on the $3,000 to $3,100 resistance zone. A bull flag is a continuation pattern that follows a sharp rally (black flagpole) to $2,730 from $1,900, with the current range forming the flag. Ethereum 1-day chart. Source: Cointelegraph/TradingView A bullish breakout above $2,600 could target $3,600, which is calculated by adding the flagpole height to the breakout point, but the immediate key area of interest remains between the resistance range at $3,100-$3,000. The 200-day exponential moving average (EMA) supports the lower range. The relative strength index (RSI), although still near the overbought region, has significantly cooled over the past few days. An ETH breakout with rising RSI and volume could confirm the bullish move, while a drop below $2,400 risks invalidating the pattern. Can Ether reclaim the Gaussian Channel midline? On May 20, Ether showed a significant trend shift as it attempted to reclaim the mid-line of the 2-week Gaussian Channel, a technical indicator used to identify price trends. The Gaussian or Normal Distribution Channel plots price movements within a dynamic range, adapting to market volatility. Historically, when ETH crosses above this mid-line, significant rallies often follow. In 2023, ETH surged 93% to $4,000 after a similar crossover, while in 2020, it skyrocketed by 1,820%, sparking a massive altcoin rally. Ethereum Gaussian channel analysis. Source: Cointelegraph/TradingView Conversely, a similar setup in August 2022 led to an invalidation during a market correction, highlighting the risks of relying solely on this indicator. Likewise, crypto trader Merlijn noted a golden cross between the 50-day SMA and 200-day SMA (simple moving average), which could further strengthen an imminent ETH breakout. It is important to note that the golden cross is on a 12-hour chart, which is less dependable than the one-day chart. Related: Bitcoin fractal analysis forecasts new all-time highs above $110K by end of week Traders exercise caution ahead of possible ‘range-bound environment’ Popular crypto trader XO noted that Ethereum is consolidating under a “decent” resistance level below the $2,800 mark. The trader expects a correction if ETH cannot break above $2,800 over the next few days. The analyst said, “I am leaning toward price carving out a range bound environment for at least several weeks potentially longer, and once again becoming a buyer.” A contrarian outlook to bulls can also be observed with ETH prices oscillating under the Fibonacci levels. Cointelegraph reported that Ether recently retested the 0.5 to 0.618 Fib levels, which could trigger a short-term correction for ETH. In such a scenario, the immediate area of support remains around $2,150 and $1,900, possibly slowing down the bullish momentum for a prolonged period. Ethereum 1-week price analysis. Source: Cointelegraph/TradingView Related: Why is Ethereum (ETH) price up today? This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
