Ethereum Ignites Wave 3 Rally: $5,600 Target in Sights After Breakout Above $4,300
Ethereum surges past $4,200 on strong volume, triggering the early stages of what analysts believe could be a massive Wave 3 rally. With key resistance broken and momentum building, a climb toward $5,600 is now firmly on the radar.
Ethereum is flashing one of the most bullish technical setups in years. After a period of consolidation, ETH has broken decisively above $4,000, now testing resistance between $4,300 and $4,350 — a move that has reignited speculation of a major Elliott Wave Cycle unfolding in real time.
Market technicians suggest this breakout could mark the beginning of Wave 3, historically the strongest and most explosive leg in a five-wave bullish impulse pattern. Known for sustained momentum and strong investor participation, Wave 3 rallies often attract both retail and institutional capital — and this time could be no different.
At press time, Ethereum trades above $4,200, supported by one of the largest single-day volume spikes in months. The surge reflects renewed confidence, with traders positioning for a potential run toward $5,600 — a target derived from Fibonacci extension levels and long-term trend projections.
Resistance and Support: The Make-or-Break Zones
The path to $5,600 hinges on two critical technical zones: resistance and support.
Currently, Ethereum is probing the $4,300–$4,350 resistance band — a range that previously acted as a ceiling. A confirmed daily close above this zone would be a powerful bullish signal, potentially unlocking the next leg toward $4,600–$4,800 before accelerating toward the ultimate target.
Beyond price levels, Fibonacci extension tools are aligning with the Elliott Wave structure. Key extensions at 1.618 and 2.618 project a realistic upside target near $5,600, especially if momentum remains intact.
On the downside, the $4,000 level has transformed from resistance to critical support — a classic sign of a market shift. A successful retest and bounce from this zone would further confirm bullish dominance.
Even deeper, the 20-day exponential moving average (EMA) at $3,647 acts as a dynamic safety net. As long as ETH holds above this level, the broader uptrend remains valid. However, a drop below $3,650 could trigger a deeper correction, potentially pulling ETH down to the 50-day EMA at $3,190 — a scenario bulls are keen to avoid.
Overbought but Not Overheated
Despite the rally, the Relative Strength Index (RSI) has climbed above 70, indicating overbought conditions. Historically, such readings can precede short-term pullbacks — especially in fast-moving markets.
However, analysts note that in strong Wave 3 phases, overbought signals often persist for extended periods. The presence of strong volume, rising open interest, and positive funding rates suggests the move is backed by real demand, not just speculation.
Moreover, late entrants and FOMO-driven buying — typical in the middle of Wave 3 — can cause temporary volatility but rarely derail the overall trend unless structural support breaks.
Conclusion: The Road to $5,600
The technical stars are aligning for Ethereum. With the $4,000 level now acting as support, momentum accelerating, and institutional inflows continuing, the case for a $5,600 target is gaining serious traction.
While sharp corrections may occur — especially as latecomers pile in — the overarching trend remains firmly bullish. Traders are advised to monitor the $4,350 breakout confirmation and defend positions above $3,650 to stay aligned with the dominant wave structure.
If history is any guide, Wave 3 doesn’t just climb — it soars. And Ethereum may be just getting started.
