Ethereum has recently formed a “golden cross” pattern on the 1-week timeframe, which is a positive signal in moving average-based trading systems. This occurs when the shorter-term moving average (the 50-week MA) crosses above the longer-term moving average (the 200-week MA). In the past, this signal has preceded significant rallies in Ethereum’s price. For example, the last golden cross in December 2020 was followed by a 600% increase in price over the next year. If history repeats itself, Ethereum could potentially reach over $12,000, more than six times its current price of around $2,000.However, it is important to note that not all golden crosses lead to the expected upside. In 2023 alone, Ethereum has experienced both golden crosses and death crosses, which can result in whipsawing price action without a clear trend to follow. To confirm the validity of the golden cross, traders often look at the Average Directional Index (ADX), which measures trend strength on a scale of 0 to 100. As the ADX for Ethereum edges up from below 20, it indicates growing momentum and reduces the likelihood of whipsawing price action. Once the ADX surpasses 20, it will provide more validity to the golden cross signal.In conclusion, while the recent golden cross pattern in Ethereum is a positive sign for the cryptocurrency, it is important to consider other factors such as the ADX to confirm the strength of the trend. Traders should exercise caution and look for high-conviction signals before making investment decisions.