Ethereum Chart Turns Bullish: New Cycle Energy Points To $5,000

Overview

Ethereum has recently been trading just above $3,300, showing a slow bullish extension over the past week. Following a period of volatility and indecisiveness, the monthly timeframe chart indicates a potentially bullish structure that traders are beginning to take seriously.

Current Market Dynamics

After experiencing wide price fluctuations and several failed attempts to sustain levels above $3,000, Ethereum’s chart is now reflecting a bullish pennant formation. This pattern is characterized by price action compressing between a rising support line and a descending resistance line. The formation of this pennant has been in progress since 2021, indicating a period of consolidation that may precede a significant price movement.

Merlijn The Trader recently shared a technical analysis on X, highlighting that Ethereum is approaching a critical juncture where consolidation could transition into a forceful expansion. The upper boundary of the bullish pennant has been tested, and Ethereum is currently retesting this trendline. A crucial barrier for Ethereum to overcome is around the $3,300 mark. A decisive break above this level could open the path towards higher resistance levels, specifically around $3,600, which has historically acted as a key turning point during previous rallies.

The most significant zone to monitor, however, lies near the August 2025 all-time high of $5,000. A successful breakout above this point would likely unleash bullish momentum for Ethereum, potentially influencing the market dynamics throughout the majority of 2026.

Analyzing the Breakout Potential

Merlijn’s analysis provides a roadmap for how Ethereum’s price movement could unfold following a breakout. After surpassing the upper trendline of the pennant, the initial step in this projection involves pushing above the $3,600 mark before facing a more substantial test near the $5,000 level. If Ethereum manages to break through this critical resistance, it could pave the way for new price highs.

However, the anticipated breakout is expected to be accompanied by volatility and potential retests, rather than a straightforward upward trajectory. If the bullish pennant thesis holds, Ethereum could experience a two-stage expansion following a breakthrough above $5,000. The first stage might involve a rally to as high as $6,000, followed by a sharp dip to around $4,000 before another recovery sequence unfolds. Ultimately, the larger leg higher projected on the chart suggests a final price target zone for Ethereum around $8,400.

From Author

As Ethereum navigates this critical phase in its price action, market participants should remain vigilant. The formation of a bullish pennant and the potential for a breakout could significantly influence trading strategies and sentiment within the crypto space. Traders are advised to monitor key resistance levels closely while being prepared for possible volatility.

Impact on the Crypto Market

• Ethereum’s bullish pennant formation may attract increased interest from traders and investors.
• A successful breakout above $3,300 could signal a shift in market sentiment and lead to higher trading volumes.
• The potential for a rally towards $5,000 may generate optimism among market participants, influencing other cryptocurrencies as well.
• Increased volatility during the breakout phase can lead to both opportunities and risks for traders.
• Observing Ethereum’s movements may provide insights into broader market trends within the cryptocurrency ecosystem.