Ethereum (ETH) reversal pattern points to an early $3.6K rally

Ethereum is forming a diamond pattern near $2.9K, with whales piling up and long-term scenarios pointing to a possible move towards $3,600.

Despite the short-term weakness, chart patterns and large holder activity have led to renewed interest in a possible recovery towards $3,600.

Diamond formation in a lower time frame

A chart shared by analyst Bryant shows a diamond pattern is 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 attracted attention as it continues to actively compress.

It is striking that the diamond is located in a demand zone, where previous purchasing interest has arisen. If ETH breaks above the upper edge of the pattern, the next possible move could push it towards $3,600. The analyst noted that it was the first time they identified this structure, which could require extra caution in interpretation.

On the monthly chart, Ethereum forms a broader structure spanning several years. Analyst Trader Tardigrade pointed to a completed double bottom pattern, with ETH recently breaking above the neckline. The setup reflects a recovery that began after the 2022 low and could support a longer-term rise as momentum builds.

$ETH/monthly
Double bottom pattern on macro with a smaller reverse head and shoulders
💥 This is super bullish #Ethereum 🔥 pic.twitter.com/3748O73Zcb

— Trader Tardigrade (@TATrader_Alan) January 23, 2026

An inverse The head and shoulders pattern has also developed inside the second bottom of the larger structure. This includes the classic division of the left shoulder, head and right shoulder. Both patterns are widely viewed in the markets as potential signals of trend reversals.

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Price action below key trend level

Currently, ETH is trading below the 9-week exponential moving average, which is almost $3,150. Staying below this level indicates that the short-term trend remains under pressure. The asset will need to regain this line to regain momentum.

The Relative Strength Index is at 43 and remains below 50. It has also fallen below its signal line, reflecting a lack of purchasing power. No difference is visible at this stage, but the RSI is approaching levels previously in line with short-term price bottoms.

Steady accumulation despite weak price

Major holders have increased their exposure to ETH through OTC channels. One whale address recently added over 20,000 ETH, worth approximately $59 million. While this activity has not yet moved the market significantly, it is contributing to a broader trend of silent accumulation.

As CryptoPotato reported, on-chain data shows that the realized price of coins in accumulation wallets is now close to current market valuation. This suggests that even though the price action appears weak, stronger hands continue to position themselves in the background.