Ethereum Has Confirmed a Breakout from the Ascending Triangle
Ethereum (ETH) has been building an ascending triangle chart pattern since mid-June, which now has been broken to the downside. This pattern implies that another move to the downside will likely be eyeing a measured move target of $730.
Ascending Triangle Pattern
The upper and lower boundaries of the ascending triangle pattern have been confirmed on multiple tests.
For example, the ETH price had three failed tests of the upper resistance level at around the $1,270 level, and we had two tests of the lower ascending support trendline.
Once the ascending triangle pattern is confirmed, the price target is located by measuring the pattern price width and applying it to the support breakout.
What is an Ascending Triangle Pattern?
The Ascending Triangle is a bullish continuation pattern that forms when the price consolidates within an upward-sloping trendline and resistance level.
This usually happens after a strong rally or breakout, as the bulls continue to push prices higher while the bears take a breather.
When the Ascending Triangle forms, it's a sign that the bulls are still in control and that we could see another leg higher in the near future.
Examples of an Ascending Triangle Pattern
There are many examples of an ascending triangle pattern. One of the most famous is the Ethereum chart from 2017. In this chart, you can see that there was a period of consolidation followed by a breakout to the upside.
This resulted in a massive rally in Ethereum prices.
Comparing Ethereum's Ascending Triangle Pattern in 2017 with 2022
Ethereum's price has surged in recent months, and it looks like the rally could continue. One reason for this optimism is the similarity between Ethereum's current price chart and the one from 2017.
Both times, Ethereum formed an ascending triangle pattern before breaking out to the upside. The breakout in 2017 led to a massive rally, and many believe that history could repeat itself in the coming months.
However, there are less chances of this occurring now than there were in 2017. This is because in 2017 the overall market was in a strong rally, while now we are in a strong bear market.
ETH Price Target
The Ascending Triangle gives us a measured move target of around $730. However, the $1,000 psychological number continues to play a big role in the short term.
Only a daily break and a close below this level will favor more downside; otherwise, we might continue consolidating.
The following support below the $1,000 round number is the $883 yearly low, which should be another challenging support level to flip.
