Ethereum has achieved a significant milestone by breaking through a pivotal price barrier. On February 28, the cryptocurrency flipped its corrective channel, leading traders to speculate on a potential major rally. Analysis from Elliott Waves Academy has indicated that Ethereum may be entering Wave 3 of (3) on the 4-hour chart, which in trader terminology signals an upcoming substantial price movement.
The target for this increase is projected at a 161.8% extension, with analysts believing this marks the beginning of a larger impulsive rally that has been developing over the past weeks. The recent price action surpassed crucial resistance levels that had constrained gains since early February.
During this breakout, trading volume surged significantly, with over $2.3 billion recorded in 24-hour volume across major exchanges. Bulls are now eyeing the next target at $2,624.14. Any price pullbacks are viewed as favorable buying opportunities for strategic investors, as local indicators reset during these dips while the overall trend remains intact.
Traders who have been awaiting the right moment can utilize these dips to establish positions ahead of the next upward movement. The $2,624.14 level is under close observation, with some analysts suggesting a push towards the 261.8% extension may be possible if buying pressure intensifies. However, it is crucial for Ethereum to maintain its position above the recently broken channel; a swift dip below could jeopardize the bullish sentiment, prompting traders to exit.
Lennaert Snyder emphasized that Ethereum”s recent bounce demonstrates strong buyer interest at essential support levels. “The liquidity grab we saw created the perfect setup for recovery,” Snyder stated. This recovery occurred precisely when bears appeared to dominate, making it a significant moment for bulls.
Despite the volatility in the market, savvy traders are cautious. They understand the risks of entering positions without clear confirmation, as they prefer to avoid potential losses in an uncertain market. This recent price movement has also opened up hedging opportunities. Establishing short positions near key resistance levels could serve as insurance while the market stabilizes. The 50% wick fill zone around $2,110 has caught the attention of short sellers, particularly if bearish market structures emerge.
Additionally, Ethereum has a Fair Value Gap that mirrors a setup seen in Bitcoin. The 50% mark of this gap is near $1,970, which could be significant for long-term investors. A retest of this FVG followed by a rebound would signal favorable conditions for accumulation strategies.
February 28 proved to be a pivotal date as Ethereum began to align more closely with Bitcoin”s trajectory. Historically, Ethereum tends to follow Bitcoin”s lead, and this correlation is becoming increasingly pronounced. As a result, traders are closely monitoring Bitcoin”s next moves, as any significant shifts in its price are likely to impact Ethereum as well. The $2,500 psychological level represents a critical upcoming test. Successfully breaking through this level would affirm the bullish narrative and likely trigger a cascade of stop-loss orders from short positions.
Institutional interest remains strong, with Grayscale Investments increasing their Ethereum holdings on February 27, which reinforces confidence in the long-term potential of the asset. This activity is noteworthy given the current market volatility. On-chain data from February 28 revealed a rise in active addresses, indicating heightened participation in the market. According to Glassnode, these spikes in engagement often precede significant price movements, and the network is experiencing an uptick in transaction volumes, suggesting increased real-world usage.
Looking ahead, the upcoming developer conference hosted by the Ethereum Foundation on March 10 could introduce developments that might influence price dynamics. Industry insiders anticipate announcements regarding network upgrades or new collaborations that could have a substantial impact. Additionally, upcoming economic data releases could affect market conditions. Shifts in macroeconomic factors typically ripple through the crypto markets swiftly, either bolstering Ethereum”s upward momentum or presenting new challenges.
Developers are actively pursuing scalability enhancements that could strengthen long-term confidence in the Ethereum network. Currently, however, the focus remains on technical levels and the sustainability of this breakout. The coming days are likely to reveal whether this momentum can be maintained. Ethereum”s current trajectory is reminiscent of similar breakout patterns observed in late 2023, when the cryptocurrency experienced a remarkable 40% surge within three weeks following analogous technical configurations.
Major exchanges such as Binance and Coinbase have reported a rise in retail interest, with new wallet creations increasing by 15% since the channel breakout. Additionally, whale activity has intensified around the $2,400 mark, as tracked by blockchain analytics firm Santiment, which noted several large transactions totaling over $10 million each. This suggests continued institutional accumulation despite recent market fluctuations, a pattern that often precedes sustained price rallies, especially when paired with strong technical breakouts like the one currently exhibited by Ethereum.
