Ethereum's Technical Indicators Suggest Potential Bull Market

According to Cointelegraph, Ethereum's native token, Ether (ETH), is exhibiting technical and on-chain signals reminiscent of its early 2017 bull run, which saw gains exceeding 25,000%. A notable indicator is the appearance of a Dragonfly Doji candlestick on Ether's monthly chart, a pattern that historically signals a potential bullish reversal. This candlestick formation, characterized by a long lower wick and a close near the opening level, suggests a rejection of lower prices and a possible shift in market control back to the bulls. In December 2016, a similar pattern preceded Ethereum's surge from under $6 to over $1,400 within a year. The recurrence of this pattern in 2021 and 2023, with gains of over 80% and 145% respectively, further underscores its significance. Should the bulls maintain momentum with a strong opening in May, particularly above April's high of approximately $1,950, Ethereum could be poised for a sustained rally, potentially targeting $2,100 initially. Ethereum is also retesting its long-term parabolic support zone, a critical area that has historically acted as a springboard for new uptrends. Chartist Merlijn the Trader highlights this retest, noting its consistency in triggering reversals across cycles. In early 2017, Ethereum's bounce from this parabolic trendline marked the beginning of its breakout phase, propelling the price from around $6 to $1,400. The current retest in 2025 mirrors this setup, suggesting a possible repetition of the cyclical pattern. This support zone's historical significance adds weight to the potential for another explosive rally, as noted by Merlijn the Trader in a recent post. On-chain data further supports the bullish outlook, with Ethereum's MVRV Z-Score re-entering the historical accumulation zone. This metric, used to identify market tops and bottoms, indicates that ETH may have reached its cycle bottom. In previous cycles, dips into this accumulation zone in late 2018, March 2020, and mid-2022 coincided with market bottoms and preceded significant rallies. The current entry into this zone strengthens the argument for a potential upward trend. However, it is important to note that this article does not provide investment advice or recommendations. All investment and trading decisions carry risks, and individuals should conduct their own research before making any financial decisions.