Ethereum (ETH) is beginning to show signs that it might enter a potential expansion phase as it nears a significant resistance level. Recently testing the $4,250 resistance area, analysts are observing market behaviors for a breakout confirmation above this price point.

On-chain data, chart patterns, and investor sentiment are converging to indicate a possible continuation of Ethereum’s price uptrend.

Power-of-3 Pattern Approaching Expansion Phase

Ethereum is currently trading just under $4,200, having increased over 2% in the last 24 hours. Technical analysts have identified a Power-of-3 (PO3) pattern evolving on the 12-hour chart. This pattern consists of three phases: accumulation, manipulation, and expansion.

According to the analyst BitBull, Ethereum has finished both the accumulation and manipulation phases. The accumulation phase saw prices fluctuate between $3,570 and $4,050, showcasing minimal volatility. Following this, the manipulation stage took place with a brief dip below $3,670, which prompted liquidity grabs before a quick recovery.

Quote: BitBull: “$ETH is perfectly forming a Power-of-3 pattern. Accumulation has happened. Manipulation has happened. A breakout and close above the $4,250 level will trigger the expansion phase.” Translation: “This is a clear pattern forming for Ethereum showing the stages of its price movement. A breakthrough above $4,250 could lead to significant price increases.”

The $4,250 resistance is seen as a critical level for ETH. Analysts suggest that a definitive breakout above this point may lead to achieving higher price targets, with Fibonacci extension levels indicating potential short- to mid-term targets of $5,270 and $5,940.

Lennaert Snyder noted that Ethereum recently tested the upper edge of its compression range around $4,250 after recovering back above $4,030, identifying plausible support zones at $4,079 and $4,000.

Long-Term Channel Supports Bullish Structure

Ethereum’s price has been following a long-term ascending channel that has persisted since 2017, supporting ETH through various market cycles, marked by higher highs and higher lows, indicative of a rising trend.

CryptoELITES shared a chart showing the 2017 and 2021 peaks forming part of this ongoing structure, stating that Ethereum is “approaching the projected 2025 all-time high.”

Reduced Exchange Reserves and Wallet Accumulation

Recent on-chain data reveals a decrease in Ethereum held on exchanges, dropping from 9 million to 6.7 million ETH, suggesting a reduction in selling pressure as tokens are increasingly being moved off exchanges. This behavior typically indicates long-term holding or staking intentions.

As reported by CryptoPotato, notable wallet activity has shifted direction; after dumping over 1.3 million ETH in eleven days, whale and shark wallets are now in the process of reaccumulating. Investor Tom Lee maintains an optimistic viewpoint.

With ETH nearing the pivotal $4,250 breakout level, both analysts and market participants are keen to see if Ethereum will proceed into the expansion phase of the Power-of-3 pattern, continuing its upward trajectory.