Ethereum price is showing a bullish future after breaking out of the symmetrical triangle. Although optimistic, ETH has to overcome some hurdles before it reaches a significant level.
Ethereum price
Ethereum price action between January 24 and March 27 has led to the formation of a symmetrical triangle pattern. This technical setup consists of three lower tops and four higher tops connected by trendlines.
Theoretical prediction methods suggest that this technical pattern could lead to a 34% movement obtained by measuring the distance between the initial swing points of the triangle. Adding this distance to the breakout point of $2,837 makes the target $3,818.
On March 27, ETH produced a daily candlestick that closed above $2,837, signaling a breakout. Since then, the smart contract token has risen by 22% but is facing bull depletion. As a result, ETH is down 7% and is currently approaching the $3,077 to $3,197 demand zone. A bounce from this barrier is likely to trigger another surge, but this time around, ETH will retest the 200-day Simple Moving Average (SMA) at $3,489.
Since this hurdle is formidable, a successful flip could hold the key to catalyzing a bull run to $3,833, the predicted target of the symmetrical triangle. In a very bullish case, this move could break the $4,000 psychological barrier, bringing the total run-up to 25%.
ETH Perpetual Futures | Source: Tradingview
The active deposits metric is an on-chain indicator that tracks the number of deposits to exchange portfolios. A rise in this index is bearish for the underlying as it indicates investors’ interest in selling their positions.
For Ethereum, this on-chain indicator has been in a downtrend since November 2021 and has deteriorated from 22,800 active deposits to 205 at the time of writing. This 95%+ drop in deposits indicates that ETH holders are optimistic about price performance. of Ethereum for the foreseeable future and keep their tokens comfortably in cold wallets.
ETH active deposits chart | Source: Saniment
Further credibility to the bullishness surrounding Ethereum price is the 30-day Market Value to Realized Value (MVRV) model. This indicator is used to assess the average gain/loss of investors who have purchased ETH tokens in the past month.
A negative reading of less than -10% indicates that short-term holders are at a loss and this is generally where long-term holders tend to accumulate. That is why a value of less than -10% is often referred to as an “opportunity zone”.
As the MVRV hovers around a local top of around 10%, a minor retracement seems likely as short-term holders panic. Interestingly, this pullback can be categorized as a bullish retracement due to the presence of the daily demand zone ranging from $3,077 to $3,197.
MVRV ratio | Source: Saniment
Overall, Ethereum price is showing a bullish outlook and is supported by on-chain indicators, suggesting a move towards $4,000 is inevitable.