Key Points
The price of Ethereum (ETH) has reached a 22-month high, marking a significant milestone for the second-largest cryptocurrency by market cap.
This surge has also contributed to the overall increase of the crypto market.
The Rise of Ethereum
During the latest trading session, Ethereum’s price peaked at $3,125, marking a 36% gain over the past month.
This price increase has also impacted the overall crypto market, which saw a 0.5% increase on the day, with total capitalization reaching $2.1 trillion.
This is a figure that hasn’t been seen since April 2022.
Interestingly, the weekly returns of Bitcoin (BTC) and Ethereum (ETH) have been very distinctive from each other in the past week.
Ethereum has registered a weekly gain of approximately 5%, while Bitcoin has faced a downfall of -2.31%.
This suggests differential on-chain activity in these assets.
The supply held by top Ethereum addresses, a metric provided by the on-chain data analytics platform Santiment, tracks the number of coins held in the largest wallets for a particular cryptocurrency.
A cumulative opening balance of 69.51 million ETH was recorded on Friday, kept by the top 1000 ETH wallets.
This cumulative number reached 69.68 million ETH on Sunday, indicating that the top wallets have invested over $514 million in just 48 hours.
This action suggests that when the most significant stakeholders for cryptocurrency make purchases during a short period, it puts upward pressure on the price.
While the uptrend for Ethereum has been tied to its anticipated approval of spot ETFs, Grayscale Investments presented a different perspective in its recent report.
An analyst from Grayscale argued that the crypto market is anticipating Ethereum’s transaction throughput and cost reduction through the Dencun upgrade more, making it more competitive with other layer-1 blockchains.
Grayscale suggests that two things could help Ethereum grow in the future.
First, it could benefit from a “net deflationary supply”, meaning there might be less Ethereum available over time, which could make it more valuable.
Second, Ethereum can generate revenue through its network, which is also beneficial for its growth.
The report also discusses how Ethereum has a chance to become more popular for smart contracts again.
Grayscale believes that if Ethereum can handle more transactions faster and at a lower cost, it can attract projects that need strong security and protection against interference.
Currently, Ethereum is trading at around $3,052, with the Exponential Moving Averages (EMA) indicating a short-term bullish trend as the price is above the EMA lines of 20, 50, 100, and 200 periods.
Fibonacci retracement levels, drawn from a low of $2,828 to a high of $3,116, show potential support and resistance levels.
The price has recently fallen below the 0.236 level ($3,062), which could act as resistance if the price tries to recover.
The Relative Strength Index (RSI) is at 44.91, which is neither in the oversold nor overbought territory, suggesting a neutral momentum.
However, a significant drop has just occurred, breaking through the 0.5 Fibonacci level ($3,003), which might indicate a stronger bearish momentum if sustained.
Technical indicators suggest caution, as further support levels may be tested if the downtrend continues.
