Ethereum

Rally

Trader

Reversal

Ethereum (ETH) is trading around $2,900, following a daily drop of over 3%. Over the past week, the price has lost nearly 12%, with sellers pushing it below the key $3,000 mark.
Despite the short-term weakness, chart patterns and activity from large holders have led to renewed interest in a possible rebound toward $3,600.
<h2 id="diamond-formation-on-lower-time-frame">Diamond Formation on Lower Time Frame</h2>
A chart shared by analyst Bryant <a href="https://x.com/TheSkayeth/status/2014593545223708876?s=20" rel="noopener noreferrer nofollow">shows</a> a diamond pattern forming on Ethereum’s 1-hour chart. This setup has developed after a clear downtrend, with the price now moving within a narrow range between $2,900 and $2,985. The shape of the pattern, often linked to reversals, has drawn attention as the asset continues to compress.
Notably, the diamond is sitting inside a demand zone, where past buying interest has shown up. If ETH breaks out above the top edge of the pattern, the next possible move could push it toward $3,600. The analyst noted that it was their first time identifying this structure, which may call for added caution around interpretation.
On the monthly chart, Ethereum is forming a broader structure that spans several years. Analyst Trader Tardigrade pointed to a completed double bottom pattern, with ETH recently pushing above the neckline. The setup reflects a recovery that started after the lows of 2022 and may support a longer-term move higher if momentum builds.
<blockquote class="twitter-tweet">
 <a href="https://twitter.com/search?q=%24ETH&amp;src=ctag&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">$ETH</a>/monthly Double bottom pattern on macro with a brewing smaller inverse head and shoulders <img src="https://s.w.org/images/core/emoji/16.0.1/72x72/1f4a5.png" alt="💥" style="height: 1em; max-height: 1em;"> This is super bullish to <a href="https://twitter.com/hashtag/Ethereum?src=hash&amp;ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">#Ethereum</a> <img src="https://s.w.org/images/core/emoji/16.0.1/72x72/1f525.png" alt="🔥" style="height: 1em; max-height: 1em;"> <a href="https://t.co/3748O73Zcb" rel="noopener noreferrer nofollow">pic.twitter.com/3748O73Zcb</a>
 — Trader Tardigrade (@TATrader_Alan) <a href="https://twitter.com/TATrader_Alan/status/2014645798685048963?ref_src=twsrc%5Etfw" rel="noopener noreferrer nofollow">January 23, 2026</a>
</blockquote>

An inverse&nbsp;head-and-shoulders pattern has also&nbsp;<a href="https://cryptopotato.com/this-ethereum-eth-pattern-could-launch-the-next-big-rally/" target="_blank" rel="noopener noreferrer nofollow">developed</a> within&nbsp;the second bottom of the larger structure. This includes the classic left shoulder, head, and right shoulder layout. Both patterns are widely watched in markets as potential signals of trend reversals.
<h2 id="price-action-below-key-trend-level">Price Action Below Key Trend Level</h2>
Currently, ETH is trading under the 9-week exponential moving average, which is near $3,150. Staying below this level suggests that the short-term trend remains under pressure. The asset will need to reclaim this line to regain momentum.
<figure style="width: 100%" class="wp-caption aligncenter">
 <a href="https://cryptopotato.com/wp-content/uploads/2026/01/ETHUSD_2026-01-23_14-05-46-scaled.png" rel="noopener noreferrer nofollow"><img src="https://cryptopotato.com/wp-content/uploads/2026/01/ETHUSD_2026-01-23_14-05-46-scaled.png" alt="Ethereum (ETH) Price Chart " width="2560" height="1272"></a>
 <figcaption>
 Ethereum (ETH) Price Chart 1.23. Source: TradingView
 </figcaption>
</figure>
The Relative Strength Index is at 43 and remains below 50. It has also dropped under its signal line, reflecting a lack of buying strength. No divergence is visible at this stage, but RSI is approaching levels that have previously aligned with short-term price floors.
<h2 id="steady-accumulation-despite-weak-price">Steady Accumulation Despite Weak Price</h2>
Large holders have been increasing their exposure to ETH through OTC channels. One whale address recently <a href="https://x.com/lookonchain/status/2014499559586857425" rel="noopener noreferrer nofollow">added</a> over 20,000 ETH, worth around $59 million. While this activity has not yet moved the market significantly, it adds to a broader trend of quiet accumulation.
As CryptoPotato <a href="https://cryptopotato.com/ethereum-eth-at-the-brink-why-this-support-level-must-hold/" rel="noopener noreferrer nofollow">reported</a>, on-chain data shows that the realized price of coins held in accumulation wallets is now close to the current market valuation. This suggests that while price action appears weak, stronger hands continue to position in the background.
The post <a href="https://cryptopotato.com/ethereum-eth-reversal-pattern-hints-at-3-6k-rally-soon/" rel="noopener noreferrer nofollow">Ethereum (ETH) Reversal Pattern Hints at $3.6K Rally Soon</a> appeared first on <a href="https://cryptopotato.com/" rel="noopener noreferrer nofollow">CryptoPotato</a>.

Ethereum (ETH) Reversal Pattern Hints at $3.6K Rally Soon

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