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Ethereum has decisively broken out of a five-year consolidation range, signaling renewed bullish momentum despite a recent 15% pullback.
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The Relative Strength Index (RSI) is entering a critical zone that historically precedes strong upward price movements, reinforcing the potential for further gains.
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According to COINOTAG analyst Sykodelic_, the presence of bearish sentiment during minor retracements actually suggests Ethereum is far from reaching a market top.
Ethereum breaks a 5-year range with strong RSI momentum, defying bearish pullbacks and setting the stage for a potential macro rally above $4,800.
Ethereum’s Breakout from a Five-Year Range Signals a New Bullish Phase
Ethereum’s recent price action marks a significant technical milestone as it breaks above a symmetrical triangle pattern that had confined its price for half a decade. This breakout, confirmed by a retest near the $3,600–$3,700 zone, indicates a shift from long-term consolidation to an emerging bullish trend. The breakout is supported by increased trading volume and a strong reaction at key support levels, which are essential factors for sustaining upward momentum. Market participants should note that such clean breakouts often precede extended rallies, especially when accompanied by healthy retests that validate the new price floor.
Bearish Sentiment During Retracements Reflects Market Strength, Not Weakness
Despite a 15% pullback following a substantial 50% price surge, bearish calls have intensified. However, as highlighted by COINOTAG source Sykodelic_, this pattern historically signals strength rather than weakness. The analyst emphasizes that “the more bears we have show up after a tiny retrace, the further we are from the top,” suggesting that widespread skepticism is a hallmark of ongoing bullish trends. This contrarian perspective is critical for traders and investors to understand, as it underscores the importance of sentiment analysis in conjunction with technical indicators.
RSI Momentum Indicates Ethereum’s Potential for Further Gains
The weekly Relative Strength Index (RSI) for Ethereum is entering what traders refer to as the “power zone,” a range that has consistently preceded significant price rallies in previous market cycles. The recent bullish crossover of the RSI moving averages further supports the continuation of upward momentum rather than signaling exhaustion. This technical setup implies that Ethereum’s price could experience sharp advances if it maintains its current trajectory. Market psychology also plays a role here; as Sykodelic_ notes, during genuine market tops, bearish sentiment disappears, and dips are dismissed as mere corrections. The current cautious sentiment therefore aligns with a healthy, sustainable uptrend.
Critical Support at $3,600–$3,700 Must Hold to Sustain Macro Rally
The $3,600–$3,700 retest zone is pivotal for Ethereum’s next phase. Holding this support level is essential to validate the breakout and pave the way for a potential rally toward the $4,800–$5,500 range, based on historical breakout patterns. Should Ethereum fail to maintain this support, the bullish thesis would weaken, risking a return to consolidation or deeper correction. Thus far, the price action around this zone has been resilient, reinforcing confidence among traders and investors that the macro rally remains intact.
Conclusion
Ethereum’s breakout from a prolonged five-year range, supported by strong RSI momentum and healthy retests, signals a robust bullish outlook. While short-term pullbacks have triggered bearish sentiment, historical patterns and expert analysis suggest that Ethereum is far from topping out. Maintaining support near $3,600–$3,700 will be crucial to sustaining momentum and unlocking further gains toward $5,000 and beyond. Investors should monitor these key levels closely and consider the broader market psychology to navigate the evolving landscape effectively.
