Ethereum: Breakout Above $4090 Signals Potential Long-Term Rally

June 9, 2024 at 12:05 AM GST 2 mins read News

Ethereum has shown reduced volatility and maintained a consolidation pattern above $3600 in the past two weeks.
Mid-May saw Ethereum rebound from $2860, increasing 39% to a 10-week high of $3975, but market uncertainty has stalled further gains.
Historically, June has been a volatile month for Ethereum, with an average negative return, highlighted by a 44.79% drop in 2022 and a 26.19% gain in 2017.

A breakout above the overhead resistance of $4090 will provide a stronger indication of an extended rally for Ethereum (ETH).

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In the past two weeks, Ethereum has shown reduced volatility, maintaining a consolidation pattern above $3600. The daily charts, characterized by short candlesticks with rejections on both sides, suggest indecision among market participants.

In mid-May, Ethereum experienced a robust rebound from the $2860 support level, indicating strong investor accumulation during market dips. This renewed buying pressure propelled the price by 39%, reaching a 10-week peak of $3975. However, the broader market uncertainty has since stalled Ether’s upward momentum, resulting in sideways trading above $3630. This support level, closely aligned with the 20-day EMA and the 23.6% Fibonacci retracement, has become a focal point for buyers.

The consistent rejection at this support level demonstrates that buyers are actively defending it. For risk-averse traders, a breakout above the $4090 resistance would confirm a prolonged rally, potentially challenging the all-time high resistance of $4880. However, if the price falls below $3630, it could intensify selling pressure and extend the current correction for an additional week or month.

Historically, Ethereum’s performance in June has been mixed, marked by significant volatility. The largest drop in June occurred in 2022, with a sharp decline of 44.79%, while the highest gain was in 2017 at 26.19%. On average, June tends to yield negative returns, with an average of 6.76% and a median of 2.53%.