Ethereum is one of the most popular cryptocurrencies in the world, and it has been performing well in the past few weeks. ETH has been trading above the $1,850 support zone, which is a key level for its bullish momentum. In this article, we will analyze the technical and fundamental factors that are driving Ethereum higher and what to expect next.

Technical Analysis of Ethereum

Ethereum has been following a steady uptrend since it broke above the $1,700 resistance in late October. The price has been forming higher highs and higher lows, indicating a strong demand for ETH. The recent rally was triggered by the successful launch of the Beacon Chain, which is the first phase of Ethereum 2.0, a major upgrade that will improve the scalability, security and efficiency of the network.

On November 8, Ethereum reached a new multi-week high of $1,925, surpassing the previous peak of $1,915 on October 30. The price is currently consolidating gains above the $1,880 level and the 100-hourly Simple Moving Average. There is also a connecting bullish trend line forming with support near $1,905 on the hourly chart of ETH/USD.

The current price action is positive above the 23.6% Fib retracement level of the recent wave from the $1,852 swing low to the $1,925 high. This suggests that Ethereum has a strong support base above $1,850 and it is likely to resume its upward move soon.

If Ethereum breaks above the $1,925 resistance, it could open the doors for more gains in the near term. The next major resistance is near the $2,000 level, which is a psychological barrier and a round number. A clear break above $2,000 could lead to a new all-time high for Ethereum in the coming days or weeks.

On the downside, if Ethereum fails to stay above the trend line support or the 100-hourly SMA, it could correct lower. The first key support is near the $1,880 level, which was a resistance turned support. The next major support is near the 50% Fib retracement level of the recent wave from the $1,852 swing low to the $1,925 high at $1,888.

A break below $1,888 could put Ethereum at risk of a larger decline towards the $1,850 support zone. This is a crucial level for Ethereum’s bullish trend and it must hold to avoid a bearish reversal.

Fundamental Analysis of Ethereum

Ethereum’s fundamentals are also strong and supportive of its price growth. Ethereum 2.0 is a major catalyst that will enhance the network’s capabilities and attract more users and developers. The Beacon Chain launch was a significant milestone that marked the transition from proof-of-work to proof-of-stake consensus mechanism. This will make Ethereum more energy-efficient, secure and scalable.

The next phase of Ethereum 2.0 is expected to be rolled out in 2022 and it will introduce sharding, which will split the network into multiple parallel chains that can process transactions faster and cheaper. This will increase Ethereum’s throughput and enable more applications to run on its platform.

Another factor that is boosting Ethereum’s demand is the growth of decentralized finance (DeFi), which is a sector that leverages blockchain technology to offer financial services without intermediaries. DeFi applications are mostly built on Ethereum and they offer various benefits such as lending, borrowing, trading, investing and earning interest on crypto assets.

According to DeFi Pulse, the total value locked in DeFi protocols has reached over $18 billion as of November 9, up from around $11 billion at the start of October. This shows that more people are using DeFi products and services and that Ethereum is benefiting from this trend.

Ethereum also has a vibrant ecosystem of developers and innovators who are constantly creating new projects and solutions on its platform. Some of the notable examples are Uniswap, a decentralized exchange that allows users to swap any ERC-20 token without intermediaries; Chainlink, a decentralized oracle network that provides reliable data feeds for smart contracts; and Aave, a lending platform that enables users to borrow and lend crypto assets with variable interest rates.

These projects and many others are enhancing Ethereum’s utility and value proposition and attracting more users and investors to its network.