Ethereum (ETH) has reignited bullish momentum after reclaiming critical support zones, pushing traders and investors to eye fresh record highs this October. The second-largest cryptocurrency by market capitalisation has not only defended key technical levels but is now showing the kind of chart structure that historically precedes significant breakouts.

Ethereum Defends Key $3,950 Support

Ethereum’s latest rebound began after it retested the $3,950 horizontal level, a price zone that has historically played a decisive role. This level initially acted as the launchpad for ETH’s 2021 all-time high of $4,877. However, that rally proved unsustainable and ETH fell back below the area, turning it into firm resistance.

For nearly three years, Ethereum struggled to reclaim this zone, facing multiple rejections. That deadlock ended in August 2025, when ETH finally broke through and soared to a new peak at $4,957. Last week’s dip tested the same area, but instead of collapsing, ETH left behind a long lower wick, confirming $3,950 as support.

This validation is crucial: the weekly chart is now forming a bullish engulfing candlestick, often a strong signal of a fresh upward leg. Technical traders widely interpret this as a breakout and retest pattern, where resistance flips into support before a rally accelerates.

Indicators Align with Bullish Outlook

Momentum indicators are also leaning in Ethereum’s favour. The Relative Strength Index (RSI) and the Moving Average Convergence/Divergence (MACD) have both reached historically strong readings without flashing bearish divergences.

Crucially, neither indicator has dipped below its respective danger zones, 50 for RSI and zero for MACD. This resilience suggests that ETH’s broader bullish cycle remains intact, as long as the price holds above the $3,950 floor.

In other words, Ethereum’s long-term trend is still upward and the latest pullback appears to have been a healthy correction rather than a reversal.

Wave Count Suggests $5,600 Target

Beyond traditional indicators, Ethereum’s Elliott Wave structure provides a roadmap for what could happen next. Analysts tracking ETH’s wave count believe the asset has now completed its fourth corrective wave in a five-wave upward cycle that began in April 2025.

Wave four bottomed out at the 0.382 Fibonacci retracement level, aligning with the top of Ethereum’s earlier ascending channel. Importantly, wave two had been a deeper, irregular correction, while wave four has been shallow and regular, a textbook alternation that strengthens the case for a final upward surge.

If accurate, wave five could propel Ethereum towards at least $5,652, a level projected by the 1.61 external Fibonacci retracement. For confirmation, ETH must break its diagonal resistance trend line, which has capped price action since its all-time high.

The recent reclaim of $4,100 and $4,250 shows early signs of strength, but the decisive moment will come when ETH closes firmly above that diagonal barrier. Should this occur, Ethereum will face little overhead resistance on its way to uncharted price territory.

Ethereum vs Bitcoin: Parallel Structure

Ethereum’s bullish setup is not limited to its dollar pairing. The ETH/BTC chart shows an almost identical wave count, reinforcing the case for an imminent move higher.

Here too, Ethereum appears to have completed wave four, bottoming out at the 0.382 Fibonacci retracement level of ₿0.035. If the pattern unfolds, wave five could take ETH up to ₿0.048 before any new corrective phase begins.

However, it is worth noting that while ETH/BTC looks primed for one last rally, its long-term trend remains tilted towards Bitcoin. This suggests that even if Ethereum outperforms BTC in the short run, the broader market dynamic may eventually shift back in Bitcoin’s favour.

October Outlook: Road to Price Discovery

With October underway, Ethereum appears well-positioned for another leg higher. The combination of confirmed support at $3,950, bullish candlestick formations and supportive momentum indicators strengthens the argument for a breakout month.

If Ethereum can maintain its grip on $4,250 and pierce its diagonal resistance, the stage will be set for a run into price discovery, potentially beyond $5,600. Such a move would not only cement ETH’s dominance in altcoin markets but also revitalise investor confidence after months of range-bound trading.

For now, all eyes remain on Ethereum’s ability to sustain momentum in the days ahead. October has historically been a strong month for cryptocurrencies and ETH’s structure suggests this year could be no exception.