Could Ethereum Deliver a 4‑Times Rally?
An assessment of technical thresholds, network fundamentals and the outlook for the world’s second‑largest blockchain.
Image: Ethereum network activity chart (source: CryptoPotato)
Market snapshot
Ethereum (ETH) has been hovering just under the $2,000 mark for the past month. A recent weekly pull‑back of about 4 % has pushed the token further away from its 2021 peak—now roughly 60 % below the all‑time high of nearly $5,000. While price momentum remains fragile, several analysts point to a confluence of technical and on‑chain signals that could set the stage for a sizeable upside move.
Technical backdrop
The “make‑or‑break” zone
Merlijn The Trader, a well‑known chartist on X (formerly Twitter), emphasizes that ETH is testing a pivotal price corridor that has historically acted as a springboard for the last bullish cycle. Four years ago, the coin found a bottom after draining liquidity between the $1.2k and $1.6k range. The current price action is again approaching the upper edge of that band.
Key technical observations:
| Indicator | Current reading | Interpretation |
|---|---|---|
| Relative Strength Index (RSI) | Near oversold territory | Momentum may be turning bullish if price holds |
| Rising trendline (multi‑year) | Still intact | Historical touches have preceded large moves |
| $1.6k resistance | Critical level | Holding may trigger renewed buying pressure |
Merlijn argues that a firm hold above $1.6k could re‑empower buyers, while a break below the lower bound would expose deeper liquidity and potentially deepen the downside. He notes that the previous successful defense of this zone preceded a four‑fold price surge, which would again push ETH well beyond its historic ceiling.
Why a 4× jump matters
If ETH were to replicate the earlier pattern, a 4× rally from the current ~$2k level would place the token above $8,000—far exceeding the $5k record set in 2025. Such a scenario would require a sustained break above the $2k psychological barrier, coupled with the re‑establishment of a bullish macro trend.
On‑chain fundamentals
Network activity has started to rebound after a sharp dip earlier in the year. Daily transaction counts, which fell below 2 million during the first half of 2025, have risen back above that threshold and are now trending higher than they were at the same time last year.
- Transaction volume: Peaked at 2.5 million in early 2025, later dropped under 2 million, and has since climbed back into the 2‑million‑plus range.
- User engagement: Analysts such as CW (X @CW8900) highlight that higher transaction levels, even amid price weakness, are a bullish indicator because they suggest continued or growing utility for the protocol.
Increased activity can be a leading signal of demand for ETH, especially as decentralized finance (DeFi) and non‑fungible token (NFT) ecosystems expand on the platform.
Analyst sentiment
- Merlijn The Trader: Calls the current price area a “make‑or‑break” level. He stresses that each historical touch of the rising trendline triggered a pronounced move, either upward or downward.
- CW (on‑chain analyst): Notes that the resurgence in daily transactions reflects a healthier user base and may counterbalance bearish price pressure.
Both viewpoints converge on the notion that a decisive price action—either a firm hold above $2k or a breach below $1.6k—will shape the next phase.
Key takeaways
- Technical crossroads: ETH is testing a historically significant price corridor ($1.2k‑$1.6k). Holding the upper boundary could reignite buying, while a failure could expose deeper liquidity and invite further declines.
- Potential upside: If the pattern repeats, a 4× rally from the current level is mathematically feasible, but it hinges on breaking and sustaining $2k.
- Network health: Transaction volumes have rebounded above last‑year levels, suggesting underlying demand that may support price recovery.
- Risk considerations: The token remains 60 % below its 2021 high, and macro‑economic factors (interest rates, risk appetite) continue to influence crypto markets. A false breakout could trap bullish traders.
- Strategic outlook: Traders and investors should monitor the $1.6k resistance, the $2k psychological level, and on‑chain metrics (transaction count, active addresses) for confirmation of a sustainable trend reversal.
Outlook
While price action alone cannot guarantee a multi‑fold rally, the combination of a historically bullish technical zone and rising network activity creates a compelling narrative for a potential upside swing. Market participants will likely watch the next few weeks closely; a decisive hold above the $2k mark could trigger a renewed bull phase, whereas a slip through the $1.6k floor may signal a continuation of the current bearish trajectory.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Cryptocurrency markets are highly volatile; readers should conduct their own research before making any trading decisions.
Source: https://cryptopotato.com/eth-tests-the-crucial-zone-that-defined-its-last-cycle-could-a-4x-rally-follow/
