in the middle of last week and after the successful implementation of Shanghai and Capella upgrade As far as Ethereum The price of the blockchain, Ether (ETH), broke above the $2,000 level for the first time since May 2022.
etherThe crypto token that powers the smart-contract-enabled Ethereum blockchain has since been consolidating on either side of the $2,100 level, with gains currently hovering around the 73% mark.
naturally, after ethereal With the latest push above the key psychological $2,000 mark and long-term resistance around $2,030, traders are asking where next for the world’s second most valuable cryptocurrency by market capitalization.
Continued consolidation over the next few days and weeks is a distinct possibility given the lack of major macro and Ethereum-specific fundamental catalysts to drive price action.
With the “Shapela” upgrade now out of the way, the focus is now looking at 1) on-chain ETH token staking trends and 2) when Ethereum developers will implement the next round of major upgrades to the blockchain.
For context, the latest series of Ethereum upgrades unlocked ETH token withdrawals for the first time since staking was enabled on the Beacon chain in December 2020.
Meanwhile, the next major macro events that could really change the narrative about US economic growth and the Fed’s tighter policy outlook come next Wednesday (Q1 GDP) and Friday (March core PCE inflation).
A steady crawl higher in ETH price is certainly possible, but the risk of further profit-taking activity remains high, with ETH’s 14-day Relative Strength Index (RSI) recently hitting the overbought zone. I have crossed.
Key ETH Levels To Watch
To the upside, traders will be watching how ETH price responds to the resistance in the $2,140-60 area, which served as an earlier yearly high and last January lows.
Meanwhile, on the downside, the nearest major area of support is the August 2022 high near the $2,040 area.
It would be uncharacteristic to see ETH sink within this range over the next few days, assuming no major unexpected catalysts come along to shake up the price action.
But should volatility pick up once again and profit-takers and shorts overcome bulls, the next major support area to watch on the downside is the 21-day moving average from late March (currently at $1,918) and the previous There is an uptrend connecting ETH. Yearly high in the $1,940 area.
A retest of this collection of support levels will be a major test of the market’s short-term bullish momentum.
Should dip-buyers return and prices rally to $1,900, many technicians could interpret this as a powerful vote of confidence in the market’s near-term outlook.
Many will likely be targeting a test of the $2,300 area.
Indeed, beyond the January low of $2,160, $2,300 is the next major area of resistance (the February 2022 low. Beyond that, the next area to watch is the March 2022 low in the $2,440 area.
If ETH bulls can push the price higher from here, there are no major resistance levels beyond the psychologically important $3,000 mark, aside from the 50% Fibonacci retracement level from the 2022 low to the 2021 record high. , which sits around $2,870. ,
While things will certainly be volatile in the coming months, the major cryptocurrencies are likely to continue trading with an upside bias.
This is because the macro conditions will change favorably as traders place bets for a Fed rate cut cycle in the second half of this year and in 2024 to avoid recession.
Meanwhile, Ether is likely to benefit from double deflationary tailwinds in the form of 1) more ETH tokens being moved into staking contracts and 2) ETH supply deflation thanks going on burn transaction fees,
Optimism about continued upgrades to the network, the next round of which should materially improve ETH’s transaction throughput through the implementation of sharding, could add another major tailwind.