Yesterday I spoke about the possibilities of Ethereum in the more grand scheme of things. I spoke about a potential head & shoulders pattern forming however, that did not end up forming and instead, a double bottom was formed as Ethereum continued to rocket through ATHs of $4372. Today, I'll be discussing the flagpole method of measuring price targets for ascending triangle, and where this could potentially take us.
The Flagpole Method
With triangle patterns, especially continuation patterns, there are typically two ways you can measure price targets. The first being measuring the distance from the swing low to the swing high as we had previously done. The second being measuring the distance the asset had moved before it formed this ascending triangle.
In this case, the ascending triangle is relevant because this was the first hiccup of Ethereum's run ahead of it going parabolic. Therefore, this ascending triangle can easily be seen as a continuation pattern and as such we can use the flagpole method to identify a secondary price target.
Using the flagpole method, through conservative and hopeful estimates, we can draw a price target region of $4900 to $5100 of the continuation pattern. This would perfectly coincide with the 5k psychological target of many. We can also see that using the Fibonacci retracement tool, there are two key fib levels in that region which could prove to be crucial in meeting the price target.
Possible Broadening Wedge Forming
As you can see in that chart, I've also plotted a potential broadening wedge forming. This is typically a bearish chart pattern which forms at the peak of bull cycles, however, the possibility of continuing to trend upwards is still very much possible. We can see a clear uprising resistance and support line continuing over from the ascending triangle which further validates the existence of the upwards trending resistance and support.
As this is typically a bearish pattern we must consider the possibility of Ethereum breaking downwards from the wedge. The price target for such scenarios is typically at the bottom of the broadening wedge which would be near the $3200 mark. Look for divergences when new highs and lows are formed to figure out where the wedge could be heading next. So far, the divergences have been formed at every exact point the price has hit the boundaries of the wedge.
Once again, I remain bullish and extremely confident Ethereum will reach $5000, however, if the ascending broadening wedge does turn out to be confirmed on the next low, it is very important to pay attention to when Ethereum does hit that low to make sure it does not break down at that point just yet. If it successfully rebounds off the $4000 mark, then I believe a take-off to $5000 is almost certain at this point. Too many signals for Ethereum to not do so. We are almost approaching the landmark.
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