Ethereum’s Price Signals Potential Rally: A Look Back to 2017

Ethereum’s price is showing signals reminiscent of its bullish 2017 phase, with a rare Dragonfly Doji candlestick appearing, suggesting potential for a price rally. Analysts indicate a retest of long-term parabolic support and underline the significance of the MVRV Z-Score entering an accumulation zone, which often signifies undervaluation. However, readers are cautioned to conduct their own research before trading.

Ethereum’s native token, Ether (ETH), is currently signalling a potential shift in market dynamics. The price has recently printed a Dragonfly Doji candlestick on a monthly chart, a rare formation often seen ahead of major bull market phases. Historically, this pattern, previously observed in 2017, has been associated with extraordinary price surges, including a staggering 25,000% increase during that cycle.

This Dragonfly Doji indicates that bulls, after struggling for a prolonged period, may be regaining control of the market. Typically, this candlestick pattern showcases a long lower wick, minimal upper wick, and closes near the opening price. Currently, this reflects a rejection of lower prices, hinting at a possible reversal. For instance, in December 2016, Ethereum formed a similar pattern before skyrocketing from below $6 to over $1,400 within about a year. The same structure contributed to notable gains in 2021 and 2023, with increases around 80% and 145% respectively.

Market analysts have noted that should May see a solid opening—particularly if ETH surpasses April’s peak of roughly $1,950—it might set the stage for a substantial multi-month rally, with the initial target set around $2,100. This potential rally mirrors historical trends, where earlier parabolic support zones acted as launching pads for future uptrends.

A chart from analyst Merlijn the Trader shows Ethereum is currently retesting its long-term parabolic support, indicated as a significant green zone. He states that in every prior cycle, a bounce from this precise area has led to a price reversal.
In early 2017, ETH experienced a rebound from this same trendline, which propelled its growth toward the $1,400 mark from a mere $6. This time around, the sentiment suggests a cyclical pattern is forming again, potentially setting the stage for another explosive rally.

Further backing this bullish outlook, the MVRV Z-Score—a crucial onchain metric for tracking market peaks and troughs—has resurfaced in the historical accumulation zone. The green band in the corresponding chart reflects this key area, which historically indicates that ETH could be undervalued. In previous cycles, similar dips were observed in late 2018, March 2020, and mid-2022, all of which coincided with market bottoms and were followed by significant price rallies.

While these signals are encouraging, it is vital to note that this article does not offer investment advice or endorsements. All trading entails risk, and individuals are urged to carry out their own thorough research prior to making any financial decisions.