Ethereum Price Forecast: As This Historical Pattern Repeats Can ETH Surge Beyond $3,000?

The rally has pushed Ethereum’s monthly gains to 59.4% and has trimmed its yearly losses from nearly 50% to 28.7%.

Meanwhile, trading volumes in the past 24 hours have more than doubled as FOMO has kicked in.

Nearly $880 million worth of short positions in the crypto market have been wiped out in the past 24 hours. Ethereum alone accounts for $300 million of that total, emphasizing how the rally has been exacerbated by an ongoing short squeeze.

Open interest in Ethereum futures has also jumped to the highest level since February 3. For months, traders had shunned ETH as the token experienced a much sharper downturn compared to its peers in the top 5.

Pectra Triggers a Strong Wave of Positive Momentum

The Pectra upgrade has apparently improved the token’s outlook. Coupled with what seems to be the beginning of a bullish cycle, ETH has emerged as one of the most promising tokens of the year.

Pectra introduces significant changes to the Ethereum network that will make it more scalable, leaner, cheaper, and faster to compete with a rising number of smart contract platforms that boast more efficient infrastructures.

One of the most encouraging changes made via Pectra is that ETH is now a deflationary token as a portion of its transaction fees will now be burned automatically.

Moreover, it increases the number of blobs per block to make layer-two blockchains like Arbitrum more efficient and cheaper to use and it also increases the amount of ETH that can be staked by validators to earn rewards.

ETH Broke Out Faster and Stronger than Anticipated

We have been keeping track of a historical pattern that has pushed Ethereum to the $3,000 to $4,000 level in the past in our most recent Ethereum price prediction.

The past four times that ETH has hit oversold levels in the Relative Strength Index (RSI), this has resulted in a significant push that has produced 100%+ gains for the token in six months or less.

Our baseline scenario was that ETH would hit the $3,000 a few months after consolidating and then a few months after breaking above that consolidation rectangle shown in the chart.

However, this consolidation period lasted much less than expected and the token has moved rapidly toward the $3,000 much faster than expected. In fact, ETH moved from oversold to overbought in just a month.

The fact that ETH hit overbought so quickly is not an indication that the uptrend has exhausted its strength. In fact, it is just an early signal of how strong this reversal has been.

Considering these early signals and the strength with which ETH is rising. We could now revisit that $3,000 forecast.

Can ETH Make a New ATH?

Two key resistances are the most relevant to watch as ETH continues to climb. The first is the 200-day exponential moving average (EMA). ETH just tagged that indicator today and it has retreated from it already.

Selling pressure above this level, which currently sits at $2,450, will likely be high. Hence, buyers need to show enough commitment to the rally to push through that important threshold.

If they do, hitting the $3,000 will be easier as ETH will blow up a significant number of short positions as it climbs above that relevant marker.

Meanwhile, if the price gets to the $3,000 level (not a big if at this point), it will be retesting a long-dated trend line from below.

Breaking through that trend line will confirm a bullish outlook and could upend our Ethereum price forecast from $3,000 to $4,000 – and maybe higher.

Pectra’s momentum seems strong and Ethereum once again demonstrated that it has enough developers behind it to push through significant upgrades.

As the dominant force in the DeFi space by total value locked (TVL) and stablecoin volumes, this kind of interest from market participants after a major update like this should not be ignored.

If historical trends repeat, there is a slight chance that we can see ETH rising to all-time highs if those two resistance levels are broken in the next couple of months.