Ethereum Price Forms Megaphone Bottom Not Seen Since 2020, Here’s What Happened Last Time

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Ethereum Price Forms Megaphone Bottom

Ethereum, the second-largest cryptocurrency by market capitalization, has been struggling to break above the 1-week MA50, leading to a bearish trend. However, a closer look at the charts reveals a megaphone bottom pattern, similar to the one seen in March 2020. This pattern is a sign of a potential reversal, and experts are optimistic about the future of ETH.

What Happened in 2020?

In 2020, the Ethereum price formed a megaphone bottom, which led to a significant rally. The price eventually broke above the 1-year megaphone and reached new highs. This time around, the situation is similar, with the price forming a lower low trendline, which is technically the bottom of a 1-year megaphone since the March 11, 2024 high.

Bullish Fundamentals For ETH

Despite the underperformance, the Ethereum price has bullish fundamentals, which could spark a reversal to the upside and cause it to reach new highs. One of the key factors is the decline in exchange reserves, which could lead to a limited supply and make it only a matter of time before ETH goes parabolic.

Supply Shock and Staking

The supply shock could come from a combination of factors, including the withdrawal of 360,000 ETH from exchanges in the last 48 hours, as noted by analyst Ali Martinez. This could be a sign of whales accumulating ETH, which is bullish for the price. Additionally, the potential approval of staking in ETH ETFs could take more ETH out of circulation, further reducing the supply and pushing the price up.

Conclusion

In conclusion, the Ethereum price has formed a megaphone bottom, similar to the one seen in 2020, which could be a sign of a potential reversal. The bullish fundamentals, including the decline in exchange reserves and the potential supply shock, make it likely that the price will continue to rise. As the price approaches the 1.5 Fibonacci extension at $6,000, investors should be on the lookout for a potential parabolic move to $8,000 or higher.

FAQs

Q: What is a megaphone bottom?
A: A megaphone bottom is a technical pattern in which the price forms a series of lower highs and lows, similar to a megaphone, which is a shape resembling a megaphone.

Q: What happened in 2020?
A: In 2020, the Ethereum price formed a megaphone bottom, which led to a significant rally. The price eventually broke above the 1-year megaphone and reached new highs.

Q: What are the bullish fundamentals for ETH?
A: The bullish fundamentals for ETH include the decline in exchange reserves, the potential supply shock, and the accumulation of whales.

Q: How high could the Ethereum price go?
A: The price could potentially reach $8,000 or higher, according to some analysts.