Ethereum, the leader in altcoins, is showing positive price movements, prompting hopes about a potential start of the much-anticipated altseason. Additionally, the price of ETH has seen a solid retest of $2,686, signaling a lack of selling momentum in the market for the coin. This might lure buyers to accumulate more in the coming hours and initiate a fresh surge for above the resistance channel.
Ethereum’s Chopfest Trading Pattern
According to the latest analysis by the noted crypto analyst Skew, Ethereum is currently navigating through a period of consolidation, often referred to as a “chopfest.” Ethereum’s price has been oscillating around significant levels, with $2,275 identified as a pivotal weekly (1W) pivot point and the $2,700 acting as a robust weekly resistance barrier.
The technical analysis further reveals that the Relative Strength Index (RSI) is positioned above 50, a promising sign for bulls. Additionally, a divergence in the Stochastic RSI, along with Higher Lows (HLs) in the price, often indicates a strengthening momentum.
$ETH 1D
Still pretty much a consolidation chopfest, however structurally there’s still HLs here$2275 ~ 1W Pivot
$2700s ~ 1W ResistanceRSI above 50 & Stoch RSI divergence with HL in price often good for momentum higher, key would be price holding $2300s with spot buying… pic.twitter.com/8KT9xerKLl
— Skew Δ (@52kskew) February 7, 2024
For Ethereum to maintain its upward momentum, it is crucial for the price to sustain above the $2,300 level, with significant spot buying activity. This level of support is crucial for the ETH price short-term trajectory.
In the shorter time frame, the 4-hour (4H) chart presents a bullish outlook with a “nice pump into daily close,” as Skew puts it. Ethereum’s price has risen above the 4H Exponential Moving Averages (EMAs), a bullish indicator if the market supports a retest of these levels. For the bulls to take control, Ethereum needs to establish a Higher High (HH) above the previous 4H bounce, which is in the $2,400 zone.
Adding to the above analysis is the positioning of the Monthly, Weekly, and Yearly Open levels, which are currently aligned around the key weekly pivot point. This convergence adds a layer of confluence, making the $2,275 level critical for determining the trend’s direction from a short-term to a high-time-frame perspective.
Skew also points to the current wide range between spot asks and bids on Binance’s spot market, indicating a level of uncertainty and anticipation among traders. Moreover, aggregate Cumulative Volume Delta (CVD) and Delta analysis suggest that spot traders continue to hold significant influence over the price and trend, with perpetual contracts (perps) being used primarily for hedging or short positions.
For Ethereum’s price to surge to higher levels, it would likely require a solid break into the $2,400 zone, backed by momentum and strength. This would signal long-term investors to bet on increasing prices, potentially igniting a new trend in Ethereum’s market.
Ethereum’s Network Upgrades Hold Buying Confidence
Despite a delay by the SEC in approving the spot Ethereum ETFs from Invesco and Galaxy Digital, Ethereum’s price surged to $2,400 earlier today. In an important step forward for the Ethereum network, the Dencun upgrade is set to be activated on the Holesky Ethereum testnet in the coming hours.
This event represents the last testnet update before the much-anticipated launch on the mainnet, with the Ethereum community eagerly awaiting an announcement of the official mainnet launch date during tomorrow’s AllCoreDevs meeting. Sources close to the development suggest that the mainnet launch could take place between early and mid-March.
A key element of the upcoming upgrade is the implementation of EIP-4844, which aims to lower transaction costs for Layer 2 rollups by introducing transactions that can carry blobs. These blobs, or binary large objects, are designed to efficiently handle large volumes of data off-chain, significantly increasing the network’s capacity for data processing and reducing the burden on storage.
The Dencun upgrade highlights Ethereum’s commitment to continuous improvement and innovation. By improving scalability through proto-danksharding, enhancing security, and building the efficiency of the network, Dencun is expected to further strengthen Ethereum’s position as a leading blockchain platform amid a surge in L2 usage.
