The Ethereum chart shows a "Power of 3" setup, with a price target above $5000.
Last week, the spot ETH ETF recorded a net inflow of 106,000 Ethereum, marking the seventh consecutive week of positive inflows.
ETH still faces a potential 25% pullback as whale inflows to exchanges increase and short positions surge.
The Ethereum (ETH) price chart displays a textbook "Power of 3" setup, following a trend divergence between $2100 and $2200 that occurred last Sunday. This movement unfolded after a price consolidation from May 9 to June 20.
A sudden liquidity sweep pushed ETH to several months of support, but buyers quickly absorbed the drop, driving the price to break above $2500 on Monday.
The Power of 3 or "AMD" model, which stands for Accumulation, Manipulation, and Distribution, provides a framework for understanding institutional investors' trading strategies around key liquidity areas.
The accumulation phase is typically characterized by quiet sideways price action, occurring between May 9 and June 20. During this phase, market participants build positions while volatility remains low, laying the groundwork for a larger move.
This is followed by the manipulation phase, visible in a brief breakdown below $2200. Here, the price action attempts to induce panic among retail investors, forcing premature selling or shorting, only to reverse sharply in the opposite direction of the anticipated move.
As ETH rebounded from $2200 to $2500, institutional investor demand followed. Glassnode data shows that the spot ETH ETF recorded a net inflow of 106,000 ETH last week, marking the seventh consecutive week of positive inflows. This significant capital flow further validates the transition of the setup to the final phase.
The distribution phase has now begun, with ETH actively moving in the opposite direction of the manipulation area. The liquidity pool above becomes a target, and as trapped positions are closed, prices tend to accelerate. In the current market, the Ethereum distribution phase targets above $5000, representing a 100% rebound.
The Power of 3 model is similar to Ethereum's rebound in 2016-2017. Newly appointed Bitmine head Thomas Lee emphasized this fractal structure, stating that ETH may be on the verge of the "most hated rally," a surge anticipated by few but driven by institutional investors and long-term market structure.
Conversely, Cointelegraph reported that a bearish outlook may also emerge. Ethereum faces a potential 25% drop to $1600 after failing to break through long-term technical resistance and falling below the multi-week chart's lower boundary of a years-long symmetrical triangle.
Meanwhile, a giant ETH whale transferred approximately $237 million worth of Ethereum from staking to exchanges, with over 62,000 ETH entering Binance within five days. This wave of redistribution from large holders to medium wallets indicates increased selling pressure, with ETH facing downside risks.
Cryptocurrency trader exitpump also noted that Ethereum is struggling to break the $2500 resistance level, with the current market shorting this altcoin. The chart shows that despite the drop in ETH prices, aggregated positions have risen during the New York trading session.
At the same time, short-term funding rates have turned negative, and spot trading volume has decreased, indicating heightened bearish pressure. With immediate liquidity now concentrated below the current range, key downside targets are between $2350 and $2275.
Related: Bitcoin (BTC) remains stable, major catalysts prepare for a breakthrough to $110,000.
This article does not contain investment advice or recommendations. Every investment and trading involves risks, and readers should conduct their own research when making decisions.
Original article: “Ethereum (ETH) Trading Pattern Points to 100% Rally to $5000: What Are the Odds?”
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