As Ethereum (ETH) begins the year recovering above the critical $3,000 threshold amid a broader cryptocurrency market rally in early 2026, it continues to grapple with the key resistance level at $3,400. Currently, the second largest cryptocurrency is entering a consolidation phase below this significant value.
Technical analyst Ali Martinez suggested that if the buying momentum seen in recent weeks continues, Ethereum could soon begin a up-to-date rally that could push it closer to reaching all-time highs.
Ethereum ready for a potential price breakout
In recent update shared on social media platform X (formerly Twitter), Martinez pointed to on-chain indicators suggesting up-to-date bullish sentiment among Ethereum investors. Notably, the number of daily vigorous addresses on the Ethereum network has doubled, exceeding 800,000 in just two weeks.
Martinez’s analysis further points to a potential correlation with growing demand for Ethereum exchange-traded funds (ETFs). As of December 29, these investment vehicles have accumulated approximately 158,545 ETH, a total valued at approximately $520 million, increasing the positive outlook for the altcoin.
It has increased chain activity has created a significant level of support for Ethereum price action going forward, particularly between $2,772 and $3,109, which could prevent it from falling below these key levels again.
Martinez believes that if these support levels remain unchanged and buying pressure continues, a break above the key resistance at $3,400 could pave the way for a significant rally towards $4,000, which would represent an upside of around 24.33% from the current trading level of around $3,217.
What awaits Altcoin?
Other analysts, such as those at BitBull, share the opinion sanguine view ETH price trajectory. The analyst has identified a potential inverse head and shoulders pattern on the 10-day chart that could lead to a bullish price target of $5,000. This projection assumes a remarkable growth of 55.48%, exceeding last year’s records.
However, despite these bullish predictions, Ethereum’s price dropped by 3% in 24 hours, according to CoinGecko data. The cryptocurrency has not yet demonstrated the bullish momentum necessary to achieve these goals.
Another encouraging factor for investors expecting prices to rise is liquidity. Market expert Ted Pillows recently excellent that after the recent drop in Ethereum prices, the maximum pain point seems to be tilting upwards.
Historically, vast investors and institutions have tended to “hunt” for liquidity levelswhich helps reset market positioning and evacuate many retail investors.
With Ethereum successfully breaching the $3,400 mark in the coming days, around $3.4 billion in tiny positions will be at risk, so the potential for significant price movement arises.
Featured image from DALL-E, chart from TradingView.com
