Home Altcoins News Ethereum Price Analysis: Why ETH Could Reach New Heights Soon

Ethereum Price Analysis: Why ETH Could Reach New Heights Soon

Ethereum

One of the main bullish signals for Ethereum is that it has successfully broken out of a resistance zone that had been limiting its upside potential for a long time. This zone was formed by the previous all-time high of $1,448 reached in January 2018, and the recent high of $1,874 reached in February 2021. Ethereum had tested this zone several times, but failed to close above it on a daily basis.

However, on March 9, Ethereum finally managed to close above the resistance zone, confirming a breakout. This was followed by a strong rally that pushed Ethereum to a new all-time high of $1,944 on March 13. Since then, Ethereum has been consolidating above the former resistance zone, which now acts as a strong support zone. This indicates that the market sentiment has changed from bearish to bullish, and that Ethereum has established a new base for further growth.

Ethereum Benefits from Fundamental Factors

Another reason why Ethereum is performing well is that it has several fundamental factors that support its value proposition. Ethereum is not only a currency, but also a network that enables innovation and development in the blockchain space. Ethereum hosts thousands of decentralized applications (DApps) that offer various services and solutions, such as decentralized finance (DeFi), gaming, social media, and more. These DApps attract users and generate fees for the network, increasing the demand and utility of ETH.

Moreover, Ethereum is undergoing a major upgrade called Ethereum 2.0, which aims to improve its scalability, security, and efficiency. Ethereum 2.0 will transition Ethereum from a proof-of-work (PoW) consensus mechanism to a proof-of-stake (PoS) consensus mechanism, which will reduce its energy consumption and environmental impact. It will also introduce sharding, which will increase its transaction throughput and speed. Ethereum 2.0 is expected to be completed by the end of 2021 or early 2022, and it could boost Ethereum’s adoption and competitiveness in the long run.

Ethereum Faces Some Challenges Ahead

However, Ethereum is not without challenges. One of the main obstacles that Ethereum faces is its high gas fees, which are the costs of executing transactions and smart contracts on the network. Due to the high demand and limited capacity of the network, gas fees have skyrocketed in recent months, making some DApps unusable or unprofitable for users and developers. This could hamper Ethereum’s growth and user retention, as well as open the door for competitors to gain market share.

Another challenge that Ethereum faces is its technical resistance at $2,000. This level is not only a psychological barrier, but also a Fibonacci extension level based on the previous uptrend from December 2018 to January 2020. Fibonacci extensions are tools used by traders to identify potential targets or reversal points in a trend. The 161.8% Fibonacci extension level of this uptrend is located at $2,002, which coincides with the round number of $2,000. Therefore, this level could act as a strong resistance for Ethereum’s price, and it could trigger some profit-taking or selling pressure.

Ethereum Price Outlook: Bullish Scenario

Despite these challenges, Ethereum has a positive outlook in the medium to long term. If Ethereum can sustain its momentum and break above $2,000 with conviction, it could trigger a new wave of buying interest and optimism in the market. This could propel Ethereum to higher levels, such as $2,500 or even $3,000 in the next few months.

The bullish scenario for Ethereum is supported by several technical indicators as well. For instance, the moving average convergence divergence (MACD) indicator is showing a positive divergence on the daily chart, meaning that the MACD line is rising above the signal line and indicating an increase in bullish momentum. Similarly, the relative strength index (RSI) indicator is showing an upward trend on the daily chart

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dan saada

Dan hold a master of finance from the ISEG (France) , Dan is also a Fan of cryptocurrencies and mining. Send a tip to: 0x4C6D67705aF449f0C0102D4C7C693ad4A64926e9

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