Ethereum Technical Analysis: Falling Wedge Points to $4.5K or $7.6K Breakout

Ethereum’s price action, currently trading around $2,850 with a slight weekly decline of 2%, is being closely scrutinized for technical signals. Analyst Don has identified a tightening falling wedge pattern on the 12-hour chart, a formation characterized by descending and converging trendlines that typically appears near the end of a downtrend. As reported by CryptoPotato, the asset is compressing within this structure, making lower highs and lower lows as it approaches the pattern’s apex. Don notes that while ETH has yet to break out, a confirmed move above the upper trendline could shift momentum upward, with a key target level marked at $4,500.

On a longer timeframe, analyst Bitcoinsensus points to a possible inverse head-and-shoulders pattern forming on the weekly chart. This structure, often linked to major trend reversals, is said to include a left shoulder from mid-2024, a head near $1,500 in early 2025, and a right shoulder currently taking shape. The critical neckline for this pattern sits at approximately $4,800. A weekly close above this level could activate a much larger rally, with an estimated technical target derived from the pattern’s height pointing toward $7,600.

In the immediate term, trader Lennaert Snyder highlights $2,850 as a crucial resistance zone. Snyder states that a reclaim of this level could open the path toward $3,000, while a rejection might push the price back toward $2,700, a scenario where he would consider shorting the failure. Concurrently, Titan of Crypto reports that ETH is testing the Senkou Span B (SSB) level on the Ichimoku Cloud indicator. A successful hold at this support could catalyze a bounce toward $3,500, whereas a failure could see the price test lower levels.

Underlying this technical analysis, market behavior shows signs of renewed interest. Following a recent dip toward $2,800, open interest in Ethereum futures has increased, indicating fresh positioning by traders. This aligns with observations from analyst CW, who notes that ETH is trading near the realized price of accumulation addresses—the average entry price for larger whale wallets. CW states, “The current price is similar to the average bought price of whales,” suggesting that significant holders are not distributing at these levels. Steady accumulation has reportedly continued since mid-year, supported by easing financial conditions and consistent inflows into the asset.

The confluence of these factors paints a picture of a market in a state of compression, awaiting a decisive directional move. The tightening falling wedge on the lower timeframe suggests a near-term bullish resolution is possible, with a breakout targeting the $4,500 region. This level would also represent a significant step toward testing the $4,800 neckline of the larger weekly inverse head-and-shoulders pattern identified by Bitcoinsensus.

For traders and investors, the key watchpoints are clear. A sustained breakout above the 12-hour wedge’s resistance, coupled with a hold above the Ichimoku Cloud’s SSB level, would strengthen the bullish case for a move toward initial targets at $3,500 and $4,500. Conversely, failure to overcome the $2,850 resistance and a breakdown from current support levels could invalidate the near-term bullish thesis and lead to a retest of lower supports. The steady whale accumulation near the realized price and rising futures open interest provide a fundamental and derivatives-market backdrop to this technical setup, indicating that both large and leveraged players are actively engaged as Ethereum coils within these critical patterns.