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Key points
- Strong positive fundamentals support Ethereum bulls in the near term.
- A technical break above the $ 420 resistance level confirms the continuation of last week’s bullish breakout.
- Analysis of the data on the chain shows an increase in activity on the Ethereum blockchain.
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Ethereum consolidated over the past three trading days after buyers failed to break out of the key short-term resistance near the $ 420 level.
Now, chain analysis reveals shoppers are preparing for a second try.
Ethereum is preparing to burst
ETH, however, managed to break out of the $ 400 resistance level last week after PayPal ad to allow its nearly 350 million users to buy and sell cryptocurrencies on the platform.
Technically, Ethereum remains bullish as it trades above its 50-day moving average, around the $ 380 support area. This support has acted as an important price barrier this month.
The price is currently capped within a range of $ 400 to $ 420, which implies that the second largest cryptocurrency may now be in a period of accumulation before a possible bullish explosion towards the $ 450 to resistance zone. $ 475.
However, this week ETH may face a small price correction around the $ 400 to $ 390 support zone if the bulls fail to break out of the $ 420 resistance zone in early week trading.
A major benefit for Ethereum bulls is the data on the cryptocurrency chain, which appears to support further price appreciation. Traders should also consider that ETH has lagged behind BTC in terms of earnings recently and may start catching up this week.
A recent increase in the balance of inbound foreign exchange indicates that large Ethereum holders are interested in buying at the current market price.
This activity also coincides with the growing number of active addresses in the last 24 hours.
An increase in recent transaction volumes indicates a greater likelihood of a large incoming price movement, highlighted in the graph below.
This is a positive event and adds credit to the idea of further bullish momentum if the price breaks out of the $ 420 resistance zone this week. However, failing to break out of that zone could lead to further price consolidation in Ethereum until US Election Day November 3.
Alongside this recovery in transaction volumes, the network hashrate remains stable as miners continue to grow behind the bullish outlook on Ethereum’s fundamentals. Additionally, confidence in a near-term bullish rally is growing as transaction volumes recently hit a new six-week high.
In addition to the technical data outlined and on-chain data points, investors are starting to quote in launch of ETH 2.0, a critical update that would improve Ethereum’s scalability.
Furthermore, the inevitable release of further US stimulus after the upcoming elections is also likely to increase the chances of further price appreciation for the second largest cryptocurrency over the medium to long term.
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