Ethereum Reclaims A Technical Level, Targets 4k

Ethereum’s native token, Ether (ETH), has reclaimed a key technical level that has historically led to sharp price increases and the start of a so-called “altseason” in several market cycles over the past five years.

ETH price could double in the coming months

This is the centerline (~$2.600) of the Gaussian Channel – a moving average-based band that tracks long-term momentum – on the bi-weekly chart.

Between 2020 and 2021, ETH rose from $400 to over $4.800 after closing above the Gaussian Channel’s midline. A similar surge in late 2023 saw ETH rise from below $1.500 to nearly $4.000 within a year.

In both cases, ETH quickly rose to and through the upper band of the channel as momentum built. As of May 2025, that upper band is around $3.200, which forms the next crucial resistance level. A break above this level could open the way to the previous cycle high of $4.100 by July.

Next ETH Surge Could Start Altseason – Analysts

According to market analyst Moustache, the ETH price surge could also influence a broader recovery in the altcoin market, citing the same Gaussian Channel fractal.

The combined market capitalization of altcoins, excluding Ethereum, surged more than 1.400% within a year after Ether closed above the channel's midline in July 2020. Similarly, altcoin market caps surged more than 200% a year after ETH broke out of the channel's midline in November 2023.

The likelihood of an altseason in 2025 is reinforced by a repeating pattern after the Bitcoin halving. In both 2017 and 2021, the dominance of Bitcoin sharply around 400 days after the halving, leading to altcoin rallies. As the April 2024 halving approaches, a similar drop could occur within the next 100 days.

Analysis by Wimar X suggests that altcoin market cap could rise to $15 trillion if this trend repeats.

Ethereum metric warns of potential bull trap

A significant portion of ETH's market cap – approximately $123 billion – is held by investors who purchased between $2.300 and $2.500, according to on-chain data from Glassnode.

If ETH price falls even slightly below this range, a large number of holders could suffer losses. This increases the risk of panic selling, which could put additional pressure on the market. Although ETH seems technically strong, support remains shallow unless it can rise further above this cost zone.

This article does not provide investment advice or recommendations. Investing and trading involve risks, and readers should conduct their own research before making decisions.

Important points:

• Ethereum has reclaimed a crucial level that has historically preceded price surges of over 100% and marked the start of previous altseasons.
• The market cap of altcoins could rise to $15 trillion if Bitcoin's dominance repeats what we saw after the previous halving.
• Despite promising signs, ETH remains vulnerable, with approximately $123 billion in supply close to cost, increasing the risk of losses.

Frequently Asked Questions

What is the impact of Bitcoin's dominance on altcoins?
Bitcoin’s dominance plays a crucial role in the performance of altcoins. When Bitcoin’s dominance declines, as often happens after a halving, altcoins typically see significant growth in their market cap and prices.

Why is the cost of ETH so important?
The cost price is important because many investors who bought around this price are more likely to sell if the price drops. This can lead to a snowball effect of panic selling if the price falls below this threshold.

What are the implications of a potential bull trap for investors?
A bull trap can mislead investors into believing that the price will continue to rise, when in fact it may fall. This can lead to significant losses and a broader decline in confidence in the market.

The current market for Ethereum and altcoins presents both opportunities and risks. With proper analysis and caution, investors can position themselves for any upcoming price movements in this dynamic sector.