Ethereum (ETH) is attempting to reclaim a crucial area as price nears its 2021 all-time high (ATH). However, an analyst suggested that this week’s performance will be key for the long-awaited price discovery rally.
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Ethereum Eyes Last Major Resistance
Over the past week, Ethereum has had a remarkable performance, jumping nearly 30% to a multi-year high of $4,750 on Wednesday afternoon, just 3.3% away from its ATH of $4,848, recorded in November 2021.
Notably, the King of Altcoins has seen a 40% recovery from the start-of-month pullback, finally breaking from its local range and reclaiming the crucial $4,000 barrier last Friday. Since then, ETH has continued to soar, reclaiming the $4,400-$4,500 area on Tuesday.
The cryptocurrency has been hovering between $4,600-$4,750 throughout the day, while attempting to break out of this range to potentially tackle “the final boss” of resistance around the $4,800 area.
Analyst Rekt Capital discussed ETH’s recent performance, highlighting that it had successfully broken out of its multi-year resistance and turned it into support after its post-breakout retest at the start of the month, which has enabled the current move to the final Macro Range, between $3,762 and $4,631, that could precede new highs.
However, he noted that the altcoin’s price “historically upside wicked beyond this final major Weekly/Monthly resistance for 3 straight weeks in a row” last cycle.
As the analyst explained, in late 2021, Ethereum was rejected from the $4,631 resistance after hitting its ATH and attempting to turn it into support in the weekly timeframe, which was followed by an 80% retracement.
This suggests that “how ETH treats $4,631 over the coming days will be pivotal” for the cryptocurrency’s upcoming performance, as it could potentially hit a new ATH but get ultimately rejected. Therefore, weekly closing above the Macro Range breakout level is crucial to “go against the grain of history.”
Is A Rejection Next?
Holding the $4,630 mark on the first attempt “would be a huge signal of strength,” the analyst asserted, but warned that “more often than not, price tends to get rejected but in a shallower manner.”
If Ethereum fails to reclaim this level, the King of Altcoins could see an 18% drop to the Macro Range lows, around the $3,762 support, which would fulfill a key recently opened CME Gap on ETH’s chart.
The Weekly CME gap, created this week, sits between the $4,091-$4,261 area, leading Rekt Capital to suggest that a more volatile retest of the CME gap could briefly send the price to the Macro Range lows.
Meanwhile, if Ethereum reclaims the final major weekly resistance as support, ETH’s price discovery rally above the $5,000 mark will be next.
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Notably, Ali Martinez suggested that once the $4,800 barrier is turned into support, the cryptocurrency will be poised for a rally to the $5,200 and $6,400 levels, according to the MVRV Extreme Deviation Pricing Bands.
As of this writing, Ethereum is trading at $4,748, a 56% increase in the monthly timeframe.
Featured Image from Unsplash.com, Chart from TradingView.com
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