Analyst Shares Historical ETH Setup For A Q1 Rally

While Ethereum (ETH) attempts to turn a crucial level into support, some analysts have shared a bullish outlook for the cryptocurrency, which could send its price above the $4,000 barrier in the first quarter of 2026.

End-Of-Year Weakness To Ignite Q1 Rally

On Monday, Ethereum broke above the $3,200 barrier for the first time in nearly a month, hitting a four-week high of $3,259. The cryptocurrency has seen a 8.3% surge from the crucial $3,000 level since Friday, consolidating above the $3,100 level over the weekend.

Now, the King of Altcoins is trying to hold the key resistance level and turn it into support. Amid this performance, some market observers shared a potential setup that could lead to a significant rally during the next three months.

In an X post, analyst Niels affirmed that Ethereum’s quarterly close in the red is “not as bearish as it looks.” Notably, the altcoin recorded its worst Q4 in six years after closing the quarter with a negative return of 28.28%, according to CoinGlass data.

This marks ETH’s first negative Q4 close since 2022, and its worst end-of-year performance since 2019, when it registered a negative return of 28.9%. Nonetheless, Niels highlighted that this opens the door for an “interesting” setup ahead of the altcoin’s expected seasonality.

ETH’s quarterly performance over the years. Source: CoinGlass

“History tells an interesting story: every single time ETH has finished Q4 in the red, the next Q1 has closed green,” the analyst explained, asserting that “year-end weakness has usually acted as a reset, not a reversal.”

Per the post, the end-of-year leverage flush and sentiment cooling have previously enabled Ethereum to start the new year “from a cleaner base,” which has allowed the altcoin to register quarterly returns of up to 52% in recent years.

“If that pattern holds, Q4 wasn’t the warning; it was the setup heading into Q1,” he suggested.

Ethereum Prepares For 30% Breakout

As the price records an 11% weekly surge, analyst Ted Pillows pointed out that the cryptocurrency is about to face an important zone that has served as resistance for nearly two months.

Since the early November pullback, the largest altcoin by market capitalization has been trading between the $2,700-$3,400 price range, experiencing strong resistance around the $3,000 and $3,200 levels.

Now that the mid-zone of the range has been momentarily reclaimed, ETH must hold its momentum and turn the upper boundary into support. “A reclaim of this level will pump Ethereum towards the $3,800-$4,000 level,” where the next major resistance is located, Ted explained on Monday morning.

On the contrary, a rejection from this resistance zone could send the ETH price toward the $3,000 support, while risking a longer consolidation within its two-month range.