Ethereum Price Unleashes Potential: Is $3K Back in Sight?

The cryptocurrency world watched closely as the Ethereum price experienced a sharp dip, falling to $2,400 on May 17th. However, a swift rebound has ignited fresh optimism among traders and analysts. Is this just a temporary bounce, or does the recent price action signal that ETH price is gearing up for another significant move higher, potentially revisiting the $3,000 level and beyond in May?

Decoding the Latest Ethereum Price Rebound

Following the dip, Ethereum (ETH) price showed resilience, climbing back above $2,500 on May 18th. This recovery wasn’t just a quiet bounce; it triggered significant activity in the crypto market, particularly for leveraged traders.

• ETH price rose by over 4.5% from its low of $2,440 to an intraday high of $2,551 on May 18.
• This move led to the liquidation of over $158 million in leveraged crypto positions across the market in 24 hours.
• Specifically, short Ether liquidations totaled $22.25 million, with a notable $7.5 million wiped out within a single hour as ETH price climbed.

This suggests that many short-sellers were caught off guard by the speed and strength of the recovery back towards the $2,500 mark. However, data also indicates potential resistance ahead, with substantial sell orders building up all the way to $3,000, suggesting this level could cap the current recovery unless buying pressure intensifies.

What Does Technical Analysis Say About ETH’s Momentum?

Market analysis often points to technical indicators to gauge future price movements. For ETH price, several technical signals are currently in focus.

Some analysts view the recent drop as a healthy technical correction designed to retest key support levels before continuing an upward trend. The weekly Stochastic RSI, currently at 79, is cited as an indicator suggesting that ETH ‘still has more gas’ to potentially move higher before entering extremely overbought territory.

Potential support levels being watched include:

• The $2,400 level, which was tested during the recent dip.
• The $2,470 level, representing the upper boundary of a four-hour bull flag pattern.
• A deeper support at $2,300, corresponding to the lower boundary of the same bull flag.

Conversely, some projections suggest a deeper retracement might be possible, with one analyst identifying the $1,800 area as a high-probability zone for bullish re-entry before a potential move towards $4,000–$5,000. The four-hour RSI has also cooled off, dropping from 60 to 42, indicating that the correction could extend if profit-taking continues.

Is the Bull Flag Pattern Still Relevant for ETH Price?

A key technical pattern analysts are tracking is a bull flag on the four-hour chart. This pattern, typically seen as bullish, forms after a sharp price increase followed by consolidation within a downward-sloping range.

• The pattern was confirmed on May 13 when ETH price broke above the upper trendline near $2,550.
• The recent price action saw Ether retesting this upper boundary, which is now acting as immediate support around $2,470.
• A daily close above $2,470 could validate the pattern and potentially target the bull flag’s technical objective around $3,720.

This technical target represents a significant potential upside from current levels, reinforcing the bullish outlook for ETH price if the pattern holds.

Beyond Charts: What Else Could Drive ETH Price Higher?

While technicals provide a roadmap, fundamental factors also play a crucial role in the crypto market. Potential catalysts for Ether’s price include:

• Increasing adoption of Artificial Intelligence (AI) technologies, which could drive demand for blockchain infrastructure.
• Potential inflows from future spot Ethereum ETFs, if approved, similar to the impact seen with Bitcoin ETFs.
• Improvements and developments through network upgrades like the Pectra upgrade.

These factors, combined with positive market sentiment, could provide the fundamental tailwinds needed to push ETH price towards and potentially past the $3,000 mark.

Conclusion: Is $3K in May Realistic for Ethereum?

The recent rebound in Ethereum price from $2,400 demonstrates underlying strength and suggests buying interest remains present at key levels. While resistance exists up to $3,000, technical patterns like the bull flag and indicators pointing to ‘more gas’ suggest the potential for continued upward movement is real. However, the possibility of further short-term correction, potentially testing lower supports, cannot be ignored. Traders and investors should conduct thorough research and consider the inherent risks in the volatile crypto market before making decisions based on ETH price movements.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.