Can Ethereum (ETH) Break Out Of Its Short-Term Wedge Pattern?

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Ethereum dropped to $3,286 in January, signaling a potential breakout from a short-term wedge pattern.

Experts predict Ethereum will surge past $4,000, reaching $4,500 in February.

Institutional interest grows with BlackRock acquiring 24,529 ETH, valued at $83.24 million.

Ethereum (ETH) ended January on a bearish note, disappointing investors who anticipated stronger performance. The leading altcoin saw its price drop to $3,286, a significant decline from mid-December when it briefly surpassed $4,000. Despite this, ETH shows signs of volatility, hinting at a potential wedge pattern breakout.

A closer look at Ethereum’s price action reveals bullish momentum, with analysts predicting a surge past key resistance levels. Crypto expert Ted Pillows asserts that ETH has entered a bullish expansion phase. He anticipates a major rally in February, potentially pushing Ethereum past $4,000 and toward new all-time highs by March.

Analysts Predict $4,000 Resistance for Ethereum

According to Ted, Ethereum has completed two crucial phases, accumulation, and manipulation, before transitioning into its expansion phase. These phases, identified in a 3-hour candlestick timeframe, unfolded in late January. Ethereum’s accumulation phase saw it trade between $3,520 and $3,185, followed by a volatile manipulation phase between January 27 and January 29.

On January 30, Ethereum officially exited the manipulation phase, signaling the beginning of its expansion. Ted argues this marks a key turning point, forecasting a price rally to at least $4,500 in February. He bases his prediction on technical patterns, rising market sentiment, and Ethereum’s perceived undervaluation, now gaining recognition.

Technical indicators present mixed signals, with ETH maintaining a volatile range. Volume levels remain a crucial factor in determining a breakout’s success. A surge in buying pressure could confirm ETH’s wedge pattern breakout, while prolonged consolidation may delay a substantial rally. Analysts believe a successful breakout could drive ETH toward the $4,000 resistance level.

Institutional Interest and ETF Developments Fuel Optimism

Recent ETF approvals and growing institutional involvement have strengthened market confidence in ETH. BlackRock, one of the world’s largest investment firms, reportedly acquired 24,529 ETH worth approximately $83.24 million. This institutional buying underscores increasing interest in ETH at its current price range.

Meanwhile, ETH spot and derivatives markets have shown increased activity. Spot trading volume surged 70.92% to $54.35 billion, while open interest climbed 1.73%, indicating renewed market participation. Ethereum spot inflows peaked at $80.35 million on Friday, reflecting heightened investor interest despite ongoing consolidation.

Exchange outflows provide another bullish signal, with ETH withdrawals surpassing deposits. According to CryptoQuant data, exchange outflows reached 205,620 ETH, compared to 204,246 ETH at the observation time. Demand slightly outweighed selling pressure, reinforcing the potential for an upward move in February.

Ethereum’s near-term trajectory hinges on its ability to break out of the wedge pattern. If successful, the altcoin could retest $4,000 before moving toward $4,500. However, failure to breach key resistance may result in extended consolidation or a possible retest of lower support levels.

As February unfolds, traders will closely monitor ETH’s price action and market trends. The combination of bullish technical patterns, institutional accumulation, and favorable market sentiment suggests ETH could be poised for a significant rally in the coming weeks.

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