The leading altcoin demonstrates resilience amid Bitcoin's correction. Technical analysis indicates the possibility of a major breakout, supported by the actions of large holders of the asset.
The market dynamics of Ethereum show signs of recovery. In the last 24 hours, the asset's value has increased by more than 1%. Over the monthly interval, the losses amounted to about 5.7%, while Bitcoin has decreased by more than 10% during the same period. The current price model and actions of institutional investors suggest the market's readiness for a trend change.
Formation of the 'Cup and Handle' figure
On the Ethereum chart, a classic technical analysis pattern, known as the 'Cup and Handle', is forming. This structure often precedes a trend reversal and the beginning of a growth phase.
The 'Cup' has formed a rounded bottom from the mid-November lows. The current pullback in quotes forms a 'handle'. The upper boundary of the pattern has a slight downward slope, but this does not invalidate the figure. The structure remains relevant as long as the price respects the boundaries of the formation and aims to test the resistance level.
Note: The 'Cup and Handle' pattern is considered one of the most reliable signals for continued growth in financial markets.
Simultaneously with the price exiting the consolidation zone, large players became active. From December 11 to 12, the balances of 'whale' addresses increased from 100.41 million ETH to 100.50 million ETH.
Thus, in a short period, 90,000 ETH flowed into the wallets of large holders. In monetary terms, at the current exchange rate, the investment amount is approximately $293 million.
Purchases from large capital often indicate expectations of continued movement. This serves as an additional support factor for the bullish scenario. Nevertheless, full realization of the pattern requires technical confirmation.
A key condition is the closing of the daily candle above the $3486 mark. This level acts as the neckline of the forming figure. Currently, the Ethereum rate is approximately 7% below this critical value.
Target benchmarks and levels for scenario cancellation
A successful consolidation above $3486 activates the pattern's execution. The calculated target of the movement is determined by the depth of the 'cup'.
According to technical analysis, the growth potential reaches the $4779 mark. This suggests an increase in the asset's value by 37% from the breakout point. However, on the way to the main target, buyers may encounter intermediate resistance. Important profit-taking levels are at $3712 and $4249. Historically, the price has often slowed down in these zones.
There is also an alternative scenario for the development of events. Buyer weakness will manifest if the day closes below $3152. Such a movement would disrupt the 'handle' structure. A complete cancellation of the bullish forecast will occur if quotes fall below $2620. This level served as the bottom of the entire formation.
Currently, the market sentiment is assessed as moderately positive. The pattern retains its integrity, and large investors continue to accumulate positions. One decisive impulse remains before confirming the breakout.
