The Ethereum network is hours away from its EIP-1559 upgrade and the anticipation is clear, judging by its impact on ETH’s performance in the last few days.

ETH has so far maintained a positive uptrend for the last two weeks after bottoming out at $1,706 in July. The cryptocurrency is currently trading at $2,583 at the time of this press, which means that its price has so far surged 51% since the recent low. It is the first time that ETH has traded above $2,500 since mid-June and it seems to be steadily maintaining its trajectory.

Source: Binance

If ETH maintains its bull run, it is expected to test strong resistance near the $2,850 price level. So far the cryptocurrency has maintained healthy buying volumes for the last 13 days although the buying is less intensive now than it was a week ago. It is not clear whether the price action will give in to some sell-offs from investors taking profit, but in case it happens, then the price should experience a bearish pullback.

Why ETH is maintaining a price above $2,500

ETH’s price action in the last few weeks indicates that the cryptocurrency has struggled to recover back above $2,500, largely due to the FUD that kept fueling selloffs in the market. However, it is now trading above that level, despite the slightly bearish trend in the cryptocurrency market this week as the total market cap dropped 2.52%.

Most of the top cryptocurrencies have experienced some price sliding in the last two days but ETH has maintained its bullish trajectory and managed to overcome the market direction. This is because investors are currently hodling their ETH so they can reap maximum upside. Investors tend to buy a cryptocurrency in the days leading up to major upgrades affecting that crypto’s blockchain. This explains why investors have been hesitant to sell ETH.

How long can the rally go on realistically?

Retail traders looking to make some gains from the current rally will likely sell in the next few days after the upgrade. It is not the upgrade itself that is causing the rally but rather the expectations that there will be a rally ahead of the upgrade. The overall market direction will likely regain its influence as soon as the upgrade happens, meaning that FUD events could play out.

In reality, the upgrades will not be immediately accretive to the Ethereum blockchain and especially not for the value of ETH. Those benefits might gradually take place, which is why long-term holders will benefit the most. The EIP-1559 upgrade will change transaction mechanisms on the Ethereum blockchain while facilitating a token burn approach that will reduce ETH supply over time. The deflationary approach will contribute to higher long-term value for ETH.

Note that Ethereum’s upgrades are designed to make it more attractive especially to developers looking for the ideal network on which to build decentralized projects. So far it is the leading contender in that field although it faces stiff competition from rival platforms, especially those that offer similar or better features with a higher transaction throughput. Congestion and high network fees are some of the challenges that Ethereum hopes to address through its 2021 upgrades.