Will the ongoing Ethereum breakout lead to a rally above $3,400 and an extended rally past the $3,568 supply zone?

As Bitcoin reclaims the $96,000 level, Ethereum is also experiencing a recovery rally. With a 3.39% surge in the past 24 hours, Ethereum is inching closer to the $3,500 mark.

Ethereum’s bullish momentum is gaining strength following a breakout rally on the 4-hour chart. Will this breakout propel Ethereum beyond the $3,500 supply zone? Let’s explore.

ETH Price Analysis

On the 4-hour chart, Ethereum’s price trend shows a triangle breakout rally gaining momentum. With a streak of six consecutive bullish candles, Ethereum has bounced 3.17% from the local support trendline, rallying from $3,333 to the current market price of $3,437.

After crossing the local resistance trendline, the bull run has surpassed the 20 and 50 EMA lines. With a price surge of 0.70% over the past 4 hours, the uptrend is now approaching the 100 EMA line.

Ethereum’s price has surpassed the short-term resistance level at $3,415, along with the dynamic resistance and trendline. The bullish recovery is supported by the 4-hour RSI line, which has reached a value of 60.32.

Heading toward the overbought zone, the momentum indicator reveals increasing buying pressure. Additionally, the likelihood of a bullish crossover between the 20 and 50 EMA lines has significantly increased, potentially signaling a buying opportunity.

Small Recovery for Ethereum ETFs 

Amid the recovery run, Ethereum ETF flows have improved. On December 31, the daily total net inflow of U.S. spot Ethereum ETFs stood at $35.93 million.

Fidelity led the bullish trend with an inflow of $31.77 million, followed by Grayscale’s Mini Ethereum Trust, which accumulated $9.77 million. However, Grayscale’s ETH ETF recorded an outflow of $5.61 million.

Ethereum Price Targets

Based on the recent price trend, the ongoing recovery will challenge the supply zone near $3,568. While the dynamic averages present strong resistance around $3,457 and $3,481, a breakout above $3,500 will determine Ethereum’s further price direction.

Specifically, a bullish close above $3,568 would increase the chances of Ethereum reclaiming the $4,000 mark in Q1 2025. However, failure to close above $3,568 could result in a continued sideways trend and heighten the likelihood of a decline below the $3,000 psychological mark.