Bitcoin retraces after hitting a new all-time high, Ethereum prepares to breakout and rally

With Bitcoin retracing after hitting a new all-time high, Ethereum, the second-largest crypto asset, has followed suit and is now trading below the $2600 level.

As Bitcoin pulls back from a new all-time high, the second-largest crypto asset, Ethereum (ETH), is also following suit and is now trading below the $2,600 level.

However, ETH’s waning performance could be short-lived as the altcoin is preparing for a key move that would trigger a major upward trend in the following weeks, crypto analyst Cas Abbe noted.

Ethereum’s Reentry Into A Bullish Phase

Even though Ethereum’s price has pulled back below $2,600, Cas Abbe, a Web3 growth manager and crypto analyst on the X platform, claims that the altcoin is showing signs of life once again as he outlines the potential for a rebound.

Cas Abbe’s forecast is based on bullish past cycle trends that influenced upward movements for ETH. In his analysis, the expert stated that ETH is attempting to reclaim a pivotal channel, particularly the Gaussian Channel that historically marked the beginning of a strong spike in price.

The Gaussian channel is a technical setup that consists of upper and lower bands as well as the base or mid-band. Following weeks of erratic consolidation, ETH is currently teetering on a breakthrough point that might rekindle momentum and push the asset back toward higher price levels.

A view of the chart shows that the altcoin has only taken back this crucial channel twice since the 2020 market cycle. Meanwhile, during these 2 times, Ethereum has witnessed a significant upward move after reclaiming the Gaussian channel.

The first time it reclaimed the channel in the 2020 market cycle, the altcoin rallied sharply from the $300 level to the $4,000 range, reflecting an over 1,300% growth. Again in 2024, Ethereum pulled back the channel, which caused its price to rise nearly 100% from $2,400 to $4,100.

With the development repeating once again, it raises the possibility that the altcoin is about to undergo another notable rally, as seen in the past scenarios. Should ETH reclaim this channel for the third time, Cas Abbe is confident that it will trigger an upswing to $4,000 by Q3 of 2025.

Growing On-Chain Activity Amid Waning Price Movements

Despite Ethereum facing bearish and selling pressure, there has been a noticeable improvement in on-chain activity in the past few days.

According to crypto investor and expert, Ted Pillows, daily contract deployments on the Ethereum network just reached their highest levels since the 2021 bull market.

The sharp surge in daily contract deployments is a clear signal that on-chain momentum is returning as builder activity spikes. It also suggests that experimentation and innovation are heating up on the network, which could pave the way for ETH’s price to rally.

According to the crypto expert, prices tend to follow growing fundamentals. As a result, Pillows is confident that the altcoin’s price could rise significantly to the $10,000 milestone before this cycle ends.