- Ethereum, the largest smart contract platform with $197 billion in total value locked (TVL), could rally up to $5,000 shortly.
- Its native token Ether (ETH) could decline after reaching the noted target.
YEREVAN (CoinChapter.com) – Ethereum price has seen a 295% uptrend throughout 2021. However, the second-largest cryptocurrency traded at $3,838 on Jan 4, 21% lower than its all-time high of $4,868 on Nov 8.
Nevertheless, several technical indicators point to an upcoming short-term uptrend that could take the Ethereum price to $5,000, marking a significant milestone for the cryptocurrency. Furthermore, a crypto analyst with the Twitter handle @KongBTC commented on Ether’s prospects, citing the Falling Wedge formation on its daily chart.
In hindsight, the formation has two converging trendlines with a descending slope that constrict the price action while driving the value down and lowering the swing. The Falling Wedge is a reversal setup; thus, it predicts a bullish continuation once ETH exhausts the formation.
@KongBTC pointed out that the pattern has played out in the past and expected a similar uptrend in the upcoming sessions, resulting in Ethereum’s price hitting $5,000. Additionally, the analytical platform Glassnode registered an outflow of ETH from exchanges.
The metric signifies the traders’ intention to hold the asset rather than exchange it for other crypto or fiat currencies. Thus, the outflow from exchanges could be interpreted as a bullish sign for Ethereum.
The weekly chart also supported the short-term gain outlook but hinted at a decline shortly after.
Ethereum price weekly chart
As mentioned, the weekly chart confirmed the short-term gain. Ether traded in a bearish pattern dubbed “Rising Wedge,” the opposite of the setup described above. However, if the Ethereum token stays within the trendlines, it could retest the resistance margin at approximately $5,000.
Once again, the digital asset retested a support trendline, instrumental since Jan 2021. If it doesn’t break below it in the upcoming sessions, ETH could climb another 30%.
Moreover, the relative strength index (RSI) divergence confirmed the bearish claim. In detail, the RSI is a momentum indicator that shows the traders’ expectations of the asset. An RSI divergence occurs when the price action prints higher highs, while the RSI graph shows lower highs. The deviation signals a looming downtrend.