- Ethereum tests $4,350 resistance, eyes potential rally toward $5,600.
- Strong breakout above $4,000 fuels wave three bullish momentum.
- Key support at $4,000 critical for sustaining upward price movement.
According to market analysis, Ethereum has climbed above $4,200 following a decisive breakout from its recent consolidation phase. This price behavior has led to the hope that the asset could be going into the third wave of its Elliott Wave phase, which has historically been identified with high and sustained price increases.
The rally was backed by a strong surge above the psychological $4,000 level, which saw one of the most significant day trading volume spikes in months.
Although the Relative Strength Index has now risen above 70, indicating that the market is overbought, the 20-day exponential moving average at around $3,647 is a firm dynamic support that has been keeping the market in a bullish pattern.
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Resistance and Support Levels Defining ETH’s Path
Ethereum is currently testing resistance in the $4,300 to $4,350 range. A confirmed daily close above this zone could open the door for a push toward the $4,600 to $4,800 area.
Continued pressure in that area would not only greatly enhance the chance of hitting the target of $5,600 but also be in tandem with the Fibonacci extension levels, which are frequently observed in strong wave three rallies.
Conversely, the first crucial support has been the level of 4,000 dollars. A retest and a successful defense would signal that the resistance was turned into support and would strengthen the bullish momentum. Nevertheless, if Ethereum does not manage to stay above the $3,650 mark, the momentum may weaken, and the coin may plunge into a more significant retracement to the 50-day EMA around the $3,190 mark.
Source: Tradingview
Market forecasts indicate that if Ethereum avoids major pullbacks and maintains its current momentum, the $5,600 target remains within reach. However, traders are advised that third-wave rallies usually attract late entrants, causing temporary but sharp corrections before the trend continues.
The present price movement indicates that Ethereum is still in its bullish cycle, and there is much technical support to the upside. However, volatility in such rallies may be high, and it is therefore essential for traders to observe resistance and support levels keenly.
Conclusion
Ethereum’s surge beyond key resistance has strengthened the case for a powerful wave three rally. As long as momentum persists and primary support levels hold, the projected $5,600 target remains a realistic short-term objective.
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