Ethereum Price Could Surge in Q1, But Risks Persists

Ethereum price has started the year well as it rose for two consecutive days. Seasonality data suggests that ETH could have a great quarter with double or triple-digit gains. However, Ether will need to overcome several important barriers for this to happen. 

Seasonality Shows Ethereum Price Rises In Q1

Historical data shows that ETH price tends to experience strong gains in the first quarter. According to CoinGlass, since 2017, Ethereum price dropped just in 2018 and 2022. 

Its best first quarter happened in 2017 when it jumped by 518%. It was then followed by a 160% increase in 2021 and 59% jump in 2024. Notably, the coin’s best first quarters happened when a new president was inaugurated in the United States.

While January has been a good month for Ethereum, February has been better as the coin has averaged 17% gains since 2017. Its only February in the red was in 2018 when it dropped by 24%. 

Therefore, this historical trend signals potential gains for Ethereum price. Some potential catalysts will be regulations, potential dovish twist by the Federal Reserve, and the upcoming FTX distributions. 

However, as described below, Ethereum will need to overcome major technical challenges to have a strong performance in Q1.

ETH Price Forms A Risky Pattern On Weekly Chart

The weekly chart paints a mixed picture for Ethereum price. On the positive side, it has remained above the ascending trendline that connects the lowest levels since May 2022. It has also formed a series of higher highs in the past few years. Ethereum also remains above the Ichimoku cloud and the 50-day moving average.

However, it has also formed a risky chart pattern known as a triple-top pattern around the $4,000 level. This pattern is made up of three peaks and a neckline, which in this case, is at $2,145, the lowest point in September last year. 

As a result, this pattern means that the value of ETH will have a strong bearish breakout in Q1. If this happens, the first target would be the neckline at $2,145, which is about 40% below the current level. 

On the flip side, a move above the triple-top pattern at $4,000 will increase the odds of ETH soaring to its all-time high at $4,800, followed by $5,000. 

Ether Price Forms A Bearish Pennant on The Daily Chart

The daily chart is also sending red alerts for Ethereum price. It initially formed a double-top chart pattern at $4,096 whose neckline was at $3,535. This pattern worked out well as the coin dropped to $3,100 in December.

Now, Ethereum has retested the neckline. A break and retest is usually a sign of a continuation. The coin has then slowly formed a bearish pennant pattern. Its flag pole started at $4,100 and the triangle has been forming and is nearing the confluence level. That is a sign that the coin may make a bearish breakout soon, with the initial target being at $3,100.

Ethereum Price Targets

ETH has numerous bullish catalysts for Q1. If bulls win, and invalidate the triple-top, it means that the coin will surge and possibly reach the all-time high at $4,800 followed by $5,000.

The alternative ETH price prediction is where the triple-top pattern works well and the coin falls to below $3,000.