As ETH price attempts to break above its five-month-old resistance trendline, the bullish prospect emerges.
Ether (ETH), Ethereum’s native token, has risen more than 415 percent this year to over $3,800, and two key bullish patterns forming on its charts suggest that it could rise even further, eventually reaching the $6,200–$6,500 price range.
The price of ETH is aiming to break through the $4000 resistance level.
A conclusive breach above $4,000, which serves as a resistance trendline to a five-month-old ascending triangle and a cup and handle pattern, might set off a textbook price surge in the following days.
The profit goal for the Ascending Triangle pattern is $6,250, which is obtained by calculating the largest distance between its horizontal and rising trendlines and adding the output to the probable breakout level of $4,000.
As a result, the price increase implies a 64 percent increase.
Similarly, the Cup and Handle pattern, which has a little lower success probability than the Ascending Triangle, is showing a potential run-up to $6,550 in the coming sessions, up 56 percent from current levels.
Its profit goal is calculated by adding the distance between the Cup’s right peak and bottom to the possible breakout level of $4,000, which is the same as the Ascending Triangle.
Trading volume, which has been declining across the construction of the abovementioned patterns, is one of the key catalysts that support the two bullish signs. This points to a lackluster sentiment among traders when it comes to consolidation. Meanwhile, the relative strength index (RSI) is below the overbought threshold of 70, indicating that a bull run is still possible.
The Bitcoin correlation effect
The bullish prediction for ETH comes after a market-wide gain, headed by Bitcoin’s (BTC) 29 percent month-to-date price increase.
According to CryptoWatch, the 30-day correlation coefficient between Bitcoin and Ethereum is about 0.89, implying that the two assets have an 89 percent chance of advancing in lockstep.
The favorable link was discovered by Ecoinometrics, a crypto-focused newsletter service, as it highlighted the Ether price’s reaction to Bitcoin “halvings,” a pre-programmed occurrence that halves the BTC’s issuance rate every four years, against its 21 million supply cap.
The portal analyzed Bitcoin and Ether’s price responses to the past two halvings and used the data to forecast their tops during the third halving on May 11, 2020. As a result, it forecasted a 29.5x increase in BTC to $253,800 by late November 2021.
Similarly, based on Ether’s 120x price rise following the second Bitcoin halving, Ecoinometrics set a price target of $22,300 for the same period.
The ETH supply problem is still going on
The continued supply squeeze for Ethereum provided more optimistic signals.
On October 1, for example, the total amount of Ether transferred into the Ethereum 2.0 smart contract reached an all-time high of about 7.98 million ETH. For a year or more, these tokens are locked and non-transferable.
Meanwhile, the overall quantity of Ether held across all exchanges remained at record lows on Monday, with CryptoQuant reporting 18.187 million ETH in reserves, down from 23.323 million ETH a year ago.
Last week, crypto data tracker Santiment reported an increase in new Ether addresses, with the number of non-zero Ether wallets reaching a new high of 64.5 million.
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This Ethereum price chart pattern indicates that ETH could hit $6.5K in the fourth quarter. was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.