Ethereum Price Poised for Blastoff? 10% Breakout in Sight, But ETH Uptrend Faces a Crucial Test

Traders backed widespread recoveries across the market after many cryptocurrencies had snapped out of their uptrends on Friday. The cooldown continued during the weekend, with Ethereum price sweeping through lower support areas at $2,115.

Meanwhile, growing optimism ahead of the likely approval of spot Bitcoin exchange-traded funds (ETFs) by the Securities and Exchange Commission (SEC) in January is keeping the crypto market not only buoyant but also bullish.

The largest smart contracts token, ETH regained momentum on Monday and was trading 4% higher on Tuesday at $2,230. Bitcoin price is equally strong, up 4.3% to $42,940 while Binance Coin (BNB), the token native to the largest crypto exchange traded 6.6% higher at $250.

Read also: Crypto Price Prediction For December 19: WOO, ICP, ADA

Ethereum Price Prediction: ETH Flaunts Potential Wedge Breakout

The rejection from the new 2023 high at $2,400 has seen Ethereum consolidate, creating a series of lower highs and lower lows. In other words, the token has printed a falling wedge pattern on the four-hour chart, awaiting confirmation before breaking out.

The falling wedge, in this case, is a continuation pattern, which bulls can tap to resume the uptrend targeting highs above $3,000. However, its formation alone is not enough, which means Ether price must rise above the upper falling trendline to validate the breakout.

If the immediate support at $2,230, provided by the 50 Exponential Moving Average (EMA) (in red) is respected, Ethereum price would have a higher probability of breaking past the wedge pattern and rising 10% to $2,500.

If losses intensify due to more profit-taking among investors, Ethereum could tap the 20 EMA (in blue) for support to ensure that chances of the wedge pattern breakout remain high, especially with the Moving Average Convergence Divergence (MACD) indicator sending a buy signal.

Following the wedge pattern breakout, key milestones to look forward to start with defeating resistance at $2,260, $2,300, and $2,360. Further gains above $2,400 would call on more traders to enter long positions in Ethereum and provide additional tail force to propel the token toward $3,000.

Since the Money Flow Index (MFI) is trending north above the midline (50), it can be deduced that there’s more bullish pressure than selling pressure. However, the situation could change, especially if the two higher support areas at the 20 EMA and 50 EMA weaken.

If push comes to shove, some traders may decide to close their positions based on their risk tolerance, and wait to buy ETH again when it finally taps a solid support, for instance, the 200 EMA (purple) at $42,150.

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