Author: Biraajmaan Tamuly, CoinTelegraph; Compiler: Tao Zhu, Golden Finance
A bull flag is forming on Ethereum’s daily chart, with a possible breakout above $3,600.
If ETH reclaims the two-week Gaussian channel midline, a 90% rebound is possible.
ETH price is consolidating between $2,400 and $2,750 on the daily chart, forming a bullish flag pattern, with a target of $3,000 to $3,100 resistance area. The bullish flag is a continuation pattern that follows the sharp rise in price from $1,900 (black flagpole) to $2,730, with the current range forming a flag.
Ethereum 1-day chart. Source: Cointelegraph/TradingView
After breaking through $2,600, the target price may be $3,600 (the price is calculated by adding the flagpole height to the breakout point), but the current key area of focus remains in the $3,100 to $3,000 resistance range.
The 200-day exponential moving average (EMA) supports the range below. The Relative Strength Index (RSI), while still near overbought territory, has retreated significantly over the past few days.
A breakout of ETH accompanied by a rise in the RSI and volume could confirm a bullish move, while a break below $2,400 could invalidate the pattern.
On May 20, Ethereum saw a notable trend shift as it attempted to reclaim the two-week Gaussian Channel middle line. Gaussian Channels are technical indicators used to identify price trends. Gaussian Channels, or Normal Distribution Channels, plot price action within a dynamic range that accommodates market volatility.
Historically, when ETH breaks above this middle line, it is usually followed by a sharp rally. In 2023, ETH surged 93% to $4,000 after a similar crossover, while in 2020, ETH surged 1,820%, sparking a massive rally in altcoins.
Ethereum Gaussian Channel Analysis. Source: Cointelegraph/TradingView
Conversely, a similar setup in August 2022 led to invalidation during the market correction, highlighting the risks of relying solely on this indicator.
Similarly, crypto trader Merlijn noted that a golden crossover between the 50-day and 200-day moving averages (SMAs) could further reinforce ETH’s impending breakout momentum. Notably, the golden crossover occurred on the 12-hour chart, which is less reliable than the daily chart.
Popular crypto trader XO noted that Ethereum is consolidating below a “pretty good” resistance level below $2,800. The trader expects a pullback if Ethereum fails to break above $2,800 in the coming days. The analyst said:
"I tend to think that prices will form a range-bound environment for at least a few weeks, if not longer, after which I will become a buyer again."
Ethereum price fluctuates below the Fibonacci levels, also reflecting a bullish view contrary to the bulls. There are reports that Ethereum recently retested the 0.5 to 0.618 Fibonacci levels, which may trigger a short-term correction in Ethereum.
In this case, short-term support levels remain near $2,150 and $1,900, which may slow down the bullish momentum in the longer term.
Ethereum price analysis for the week. Source: Cointelegraph/TradingView
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