Ethereum’s Trading Pattern Signals Potential Rally to $5,000
Ethereum (ETH) has recently formed a ‘Power of 3’ technical pattern, suggesting a potential price surge toward $5,000. This bullish setup emerged after ETH consolidated between $2,100 and $2,200, mirroring a similar pattern that preceded Ethereum‘s 2016-2017 rally. Institutional investors appear to be driving this potential movement, according to market analysts.
Understanding the ‘Power of 3’ Pattern
The AMD model (Accumulation, Manipulation, Distribution) explains this three-phase pattern. Between May 9 and June 20, ETH entered the accumulation phase with sideways trading near $2,100. This quiet period typically allows large investors to build positions before significant price movements.
Institutional Interest Grows Through ETH ETFs
Data from Glassnode shows spot ETH ETFs attracted 106,000 ETH in net inflows last week – the seventh consecutive week of positive flows. These sustained inflows suggest institutions are entering the distribution phase, where prices typically make their strongest upward moves.
Potential Market Challenges
Despite bullish indicators, ETH faces resistance at $2,500. Some analysts warn of a potential 25% correction to $1,600 if this resistance holds. Increased ETH transfers to exchanges by large holders may signal growing selling pressure.
Current Market Sentiment
Short positions on ETH have risen recently, with negative funding rates and increased open interest during price declines. This suggests some traders expect near-term downside, though the overall pattern remains bullish long-term.