Ethereum (ETH) has experienced a notable over 10% correction from its New Year highs, recently falling below the critical $3,300 support level. Despite this ongoing pullback, an optimistic sentiment persists among some analysts regarding Ethereum’s potential performance in the first quarter of the year, with suggestions that new highs may be on the horizon.
Ethereum Forming Bullish Pattern
Ethereum’s recent market activities have raised questions as it dropped below $3,320 today, effectively erasing its gains accrued at the start of the year. The market correction has led to a significant 14% decrease, with the price plunging from a high of $3,744 earlier in the week to levels under $3,300.
During the initial rally at the beginning of the year, ETH’s price had shown resilience, climbing 20% from the lows experienced during previous corrections. However, recent volatility, which also saw Bitcoin decline by 7.2% within 24 hours, pushed Ethereum’s value down to approximately $3,210 by Thursday morning. The previous week had established the $3,200-$3,300 range as a critical support zone for Ethereum.
Despite the downturn, numerous analysts are echoing the belief that ETH is developing a significant reversal pattern that may lead to higher price levels. Notably, crypto analyst Rekt Capital has pointed out the formation of a multi-month inverse Head and Shoulders pattern in the one-month timeframe. According to this analysis, the $3,650-$3,760 area poses a considerable resistance, just below the pivotal $4,000 mark, which is expected to serve as a neckline to the developing pattern.
Rekt Capital elaborated that the recovery aim is likely at the psychological $3,000 level, indicating that any retracement towards this area could potentially shape the right shoulder of the inverse pattern.
Echoing a similar bullish sentiment, analyst Miky Bull has pointed to the same reversal pattern, estimating a looming target of $7,000 for Ethereum. This assessment implies a potential increase of approximately 87.53%, projecting prices could reach the range of $7,400-$7,500 if the bullish scenario unfolds.
Could ETH Avoid Major Retraces?
Further analysis by Ali Martinez also supports a bullish outlook, suggesting any dip towards $2,900 would represent a strong buying opportunity, setting the stage for a target of $7,000 in the future. Martinez conveys that the bullish narrative would lose credibility if ETH were to dip below $2,800, where the left shoulder of the pattern initially formed.
Another market observer has drawn parallels between the beginning of 2024 and the developments in 2025, noting that ETH’s recent drop below its yearly opening occurred in January 2024, followed by a recovery in February. This observer highlighted the importance of not misinterpreting transient bearish movements as long-term trends, asserting confidence in the bullish outlook for the first half of 2025.
Analyst Crypto Wolf predicts limited downside for Ethereum, estimating a potential retracement of only 4% to 7% before the cryptocurrency sets its sights on new all-time high levels.
As it stands, Ethereum is trading at approximately $3,255, reflecting a daily decrease of 2.15%.
