The price of Ethereum shows an interesting development over the past week. Despite collapsing, ETH appears to be in a position to show positive returns this week that could propel it to significant levels.
Ethereum price recovery in progress
The price of Ethereum plunged more than 30% over the past six months and set a low of around $978 (₹78085.95). This movement formed the second high swing and the third low swing. This descent was crucial in establishing an ascending parallel channel.
However, drawing a trend line linking the two highest highs and the three highest lows shows the formation of an ascending parallel channel. The last two times the price of Ethereum marked the channel’s lower trend line, it was followed by a 43% increase.
In the last month, it is already up by around 25%.
Therefore, investors may become cautiously optimistic in the current position and start accumulating ETH in the hope of a higher move. The parallel channel is the first and most important reason why the price of Ethereum is likely to reverse and undo losses.
The second reason is the bullish divergence formed between the highest price lows and the lowest lows of the Relative Strength Index. This configuration forecasts a bullish move for ETH and is likely to drive ETH higher.
In addition, the use of the Fibonacci tool for the 43% increase from January 22 to February 10 reveals that the next move is saturated at a 27% retracement level at $3554. Using the same logic and applying the Fibonacci tool for the second hike between March 7 and April 3, it reveals that the target could be $3,856.
Since all perspectives suggest a bullish outcome, there is a good chance that ETH could set the target of $3,856 and reach the psychological level of $4,000.