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 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%.
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.
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.
Overall, Ethereum price is showing a bullish outlook and is supported by on-chain indicators, suggesting a move towards $4,000 is inevitable.