Ethereum reflects Solana's bullish breakout pattern; indicators point to strong potential upside momentum.
- Ethereum reflects the exact structure of Solana, namely its triangular formation below resistance.
- Multiple liquidity grabs on ETH may trigger a rebound.
Comparing the charts of Ethereum [ETH] and Solana [SOL], it can be seen that the recent price action of ETH is strikingly similar to the price action of SOL in early 2023.
Solana's price formed an ascending triangle in early 2023, consolidated below resistance, and ultimately broke out, leading to a massive rally of over 222%.
As of the time of writing, Ethereum is reflecting this precise structure - forming an ascending triangle below its resistance, displaying similar accumulation and consolidation.
Given this consistency in the pattern, if Ethereum follows the same trajectory as Solana, it may be on the verge of a significant bullish breakout.
Ascending triangles are generally viewed as bullish continuation patterns, suggesting that a breakout could propel ETH significantly higher. Momentum indicators and trader activity need to align for ETH to achieve comparable gains.
If Ethereum breaks above the current resistance area, it could trigger a strong rebound, with the potential to achieve a similar percentage increase, ushering in another substantial uptrend for ETH.
RSI and MACD indicators suggest...
Furthermore, Ethereum's Relative Strength Index and Moving Average Divergence Convergence indicators point to potential market strength.
The RSI is hovering in the neutral to slightly bullish territory, indicating that the momentum may be starting to tilt upwards. The MACD histogram shows the red bars gradually diminishing, hinting that the bearish pressure may be easing.
Additionally, the MACD line appears to be approaching a crossover above the signal line, which is a common bullish signal.
Overall, these indicators suggest that if fundamentals such as liquidity grabs and on-chain activity surge in line with the price pattern, ETH may see some buying momentum.
The impact of liquidity grabs on ETH's price action
Examining the ETH liquidity heatmap clearly reveals a familiar pattern: another day marked by strategic liquidity grabs.
The price action has continued to decline to absorb liquidity, forming a series of wicks, indicating that market makers and large participants are flushing out the weak hands.
Following this liquidity grab, ETH appears poised for a rebound, especially given the significant liquidity still congregated above the current price levels.
These elevated liquidity levels act like magnets, making it highly likely that Ethereum will target these areas, with the next move being upwards. This could lead to ETH achieving gains similar to the 222% seen in SOL.
Traders can expect that after this liquidity sweep, ETH may leverage its regained momentum to climb and occupy the nearby liquidity pools, potentially leading to a short-term bullish trend.