The price of Ethereum has risen by 6.7% in the last 24 hours and is holding close to 3320 USD. The rise followed the confirmation of the breakout structure on December 3, with further prediction indicating a level of 3710 USD.
However, mixed signals now suggest that this increase may take a bit longer.
The breakout structure remains intact as a bullish crossover of the Ethereum price approaches.
The price of Ethereum continues to move within the same inverse head and shoulders pattern that formed at the end of November. The movement remained significant after December 3, as the support of the right shoulder at the level of 2710 USD held. The structure will only weaken if the ETH price falls below this level.
Currently, the key signal is the formation of a bullish crossover between the 20-period EMA (exponential moving average) and the 50-period EMA. The Exponential Moving Average tracks price with greater significance of the most recent candles.
A bullish crossover usually suggests that buyers are gaining strength and momentum can maintain the same direction. This signal may push the price of Ethereum towards the designated target of 3710 USD.
This crossover will only occur if sellers do not respond by taking profits. One on-chain indicator shows why caution is warranted.
Increasing paper profits create a window for profit-taking.
The Net Unrealized Profit/Loss (NUPL) indicator for Ethereum measures the 'paper profit' held by all ETH wallets. When NUPL rises, more holders have a reason to sell because they have larger unrealized gains.
The NUPL value for ETH has now risen to 0.296, entering an area of optimism, which translates to unease. This is the highest level since the beginning of November.
The last time the NUPL indicator reached a similar level — on December 3rd — the price of Ethereum fell by about 5.2% in two days as investors took profits.
A similar situation is now visible. Profitability is rising again, and ETH is close to an important resistance area. This increases the chance that some holders will sell before the bullish crossover is confirmed. In that case, the crossover may fail, and momentum may slow down, even though the breakout structure is still important. This explains why the price of Ethereum is susceptible to a longer stall before the potential target of 3700 USD is reached.
Key price levels for Ethereum: What opens the way to 3710 USD and what blocks it.
If the bullish crossover is confirmed and the pressure from the NUPL indicator remains limited, the price of Ethereum has a clear path upward:
the signal is a close of the 12-hour candle above 3390 USD,
the next resistance is at 3570 USD,
breaking above 3570 USD opens a full move towards 3710 USD, which is the expected 20% breakout from the starting point.
On the other hand, the risk of a reversal is also present when selling occurs, which may weaken the structure. The price of Ethereum holds importance above 2710 USD, but a drop below 2610 USD would invalidate the setup and may indicate a deeper correction.
Currently, ETH is situated between two forces. It is a bullish crossover that could push the price towards 3710 USD, and rising paper profits that may delay the move. The upcoming sessions will decide which side wins.
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