Ethereum (ETH) Shows Promising Signs of a Breakout Despite a Disappointing Performance in Q1 2025

Ethereum is showing promising signs of a possible breakout despite a disappointing performance in the first quarter of 2025. Trading at $2,062 as of March 26, ETH has formed technical patterns that some analysts believe could lead to five-digit price targets in the future.

Ethereum is showing promising signs of a possible breakout despite a disappointing performance in the first quarter of 2025. As of March 26, ETH is trading at $2,062, forming technical patterns that could lead to five-digit price targets in the future.

What Happened: The current price action shows ETH forming higher highs and higher lows on daily charts. This pattern suggests buyers are attempting to reverse the recent bearish trend.

Ethereum has recently tested the $2,100 resistance level and is now pulling back to establish a stronger foundation. Market watchers believe that as long as ETH forms a higher low above $1,934, the bullish trend will remain intact.

For the bullish outlook to gain momentum, Ethereum needs to overcome key resistance levels at $2,100 and $2,166. Breaking through these barriers could open the path for rallies of 20%, 28%, and 40% to reach $2,600, $2,770, and $3,000 respectively.

Two crypto analysts have shared fractal analyses that point to much higher targets. The first analysis identifies a "1, 2, 3 bounce pattern" similar to what occurred in 2017, 2018, and 2020, which could lead to a price between $10,000 and $11,000.

The second analyst has spotted a declining broadening wedge pattern. This technical formation typically signals the end of a downtrend and the beginning of a strong upward movement, with a potential target around $20,000.

Analyst Gert van Lagen has identified a complex Inverse Head and Shoulders (iH&S) pattern on weekly charts. This classic bullish reversal structure often marks the end of a downtrend.

This support level acted as resistance during the ‘head’ phase. Now price successfully retested it as support.

Now the Left and Right shoulders are well-aligned.

According to van Lagen's analysis, the left shoulder of this pattern formed from 2021 to 2022. The head developed from 2022 to 2023 during the market downturn, while the right shoulder formed in 2024.

The most important level to watch in this pattern is the neckline at approximately $3,978. A breakthrough above this resistance with strong volume could validate the pattern and potentially push ETH toward an $18,000 target.

What's Next: To support the bullish outlook, CME gaps at $2,623, $2,888, $3,237, and $3,930 could come into play. These unfilled price gaps on futures charts often act as magnets for price action.

Also, Ethereum ETF outflows have been decreasing since February 26 and reached zero on Monday. If this trend continues and turns into inflows, it could add more buying pressure to ETH.

Data from CoinGlass shows that about $701 million in short positions would face liquidation if Ethereum rises to $2,114. Such forced closures would require investors to buy back their positions, ultimately increasing demand for ETH and pushing prices further upward.

It's worth noting that Ethereum has had one of its most challenging starts to the year. ETH has seen a year-to-date decline of 43%, making it the second-worst first quarter performance in its history.

This poor performance is in stark contrast to Bitcoin and XRP, which have seen gains of 23% and 279% respectively during the same period. Market expert Lark Davis highlighted this downturn in a recent social media update.

However, despite the recent struggles, historical data shows that Ethereum has seen an average surge of 66% during the second quarter since 2016. If this pattern continues, we could see ETH price climb to $3,200 in the coming months.

For the immediate term, analyst Ali Martinez identifies $2,300 as a critical resistance level that Ethereum must overcome for a sustained recovery.

ETH has also reclaimed its realized price of $2,040, which is a positive sign.

While short-term challenges persist, Ethereum's long-term outlook remains positive according to many analysts. The current technical patterns, decreasing ETF outflows, and potential short squeeze could combine to fuel a strong recovery in the coming months.