- Ethereum forms a bullish pennant; breakout above $2,550 could trigger a rally to $3,500+.
- Strong institutional buying and declining exchange reserves signal growing confidence in ETH.
- Golden cross and solid 200-day EMA support boost Ethereum’s medium-term bullish outlook.
Ethereum is trading within a narrowing range between $2,400 and $2,750, forming a textbook bullish pennant pattern. With technical support near $2,500 and growing institutional interest, analysts say a confirmed breakout above $2,550 could open the path toward a rally with targets above $3,500.
Technical Setup Builds Toward Potential Breakout
The current Ethereum price structure shows consolidation after a strong move from $1,900 to $2,730, forming the base of the bull flag. ETH is holding above key support at $2,300, which has been tested multiple times but not broken. The $2,550 level remains critical, and a breakout above this line would complete the pennant.
According to analysis prepared by crypto analyst Martinez, Ethereum shows signs of strength as it continues to build higher lows, while the 200-day EMA offers solid structural support. Martinez identifies $3,100 as the next major resistance, with a clean breakout above this zone potentially extending gains further toward $3,500.
Ethereum also recently registered a golden cross on the 12-hour chart, with the 50-day simple moving average crossing above the 200-day average. Such crossovers are often linked to medium-term bullish trends, especially when combined with rising RSI and volume.
Institutional Accumulation and On-Chain Strength Support the Trend
Institutional demand remains strong. According to Arkham Intelligence, Abraxas Capital purchased 350,703 ETH since May 7, with a recent addition of 46,295 ETH worth $115.3 million. This accumulation reflects growing confidence, with an average buy price of $2,386.
Ethereum’s exchange reserves are declining, indicating tighter supply. Spot ETF inflows also resumed, with $64.8 million added on May 20 alone. Data from Coinglass shows open interest in Ethereum futures holding steady at $31.32 billion, while recent price action suggests buyers are defending key zones.
If Ethereum clears the $2,550 resistance with strong volume, the current setup could initiate a move toward $3,500 and beyond.
