Ethereum’s $4,000 Breakout Could Spark a Rally to $8,000

• Ethereum is forming a bullish pattern that could lead to a strong breakout above $4,000.  
• A confirmed breakout may push Ethereum’s price toward $6,000 or even $8,000.  
• Liquidation trends show intense market activity as traders position for the next big move.  

Ethereum (ETH) is displaying a classic Cup and Handle pattern on the two-week timeframe, signaling a potentially significant bullish breakout. According to Alex Clay, a seasoned crypto analyst, Ethereum is approaching a major horizontal resistance level at $4,000, a key neckline for this bullish structure. 

With ETH currently trading at $4,017.8, Clay emphasizes that breaking above this resistance could propel Ethereum into a substantial rally, targeting prices between $6,000 and $8,000.

ETH’s $4,000 Resistance Breakout Could Trigger a Run to $8,000

The Cup and Handle is a widely recognized bullish continuation pattern in technical analysis, characterized by a rounded bottom followed by a brief consolidation phase (the “handle”). Ethereum’s chart perfectly exemplifies this pattern, with the “cup” formation spanning from May 2021 to late 2023. 

During this period, ETH retraced deeply, finding support at the 0.23 Fibonacci retracement level before initiating recovery. The formation also highlights a “fakeout” breakout in November 2021, when ETH surged to nearly $4,800 but subsequently entered a prolonged corrective phase, solidifying the structure of the “cup.”

Ethereum’s $4,000 Resistance Is the Bullish Pivot Investors Await

At present, Ethereum is retesting its $4,000 neckline resistance, a pivotal level that has historically acted as a ceiling for price movements. Clay identifies this resistance as the key to unlocking Ethereum’s bullish potential. Should ETH successfully close above this level, the projected price targets, derived from Fibonacci extension levels, become actionable. 

Specifically, the 1.618 Fibonacci extension level points to a target near $6,000, while the 2.272 level forecasts an ambitious price of approximately $8,000, aligning with Clay’s highlighted “Main Target Area.”

In his analysis, Alex Clay underscores that failing to break the $4,000 level could temporarily invalidate or delay the bullish setup. However, the pattern’s completeness, coupled with Ethereum’s historical price behavior and fundamental strength, strongly supports a bullish outlook. 

ETH Traders Eye $6K as Liquidations Confirm a Bullish Breakout Pattern

The liquidation data, sourced from Coinglass, reveals a surge in trader activity as ETH’s price moves toward $4,000. During the recent rally from $2,000 in mid-October to $4,000 by early December, liquidations of long positions began to dominate, reflecting the increasing leverage in bullish bets. In mid-November, short liquidations spiked above $100 million as ETH’s price surged past critical levels, catching bearish traders off guard. 

This aligns with Alex Clay’s analysis that Ethereum’s current structure is a battle between bulls attempting to confirm the Cup and Handle breakout and bears defending the $4,000 resistance. 

The liquidation trends amplify this narrative, as a breakout above $4,000 could trigger further short squeezes, accelerating ETH’s ascent toward Clay’s projected targets of $6,000 to $8,000. This convergence of technical patterns and liquidation behavior highlights Ethereum’s pivotal moment in both price action and market sentiment.