Ethereum has jumped 10% since last Friday, signaling a significant rebound as the crypto market responds to local demand conditions. However, ETH has been underperforming compared to Bitcoin and other altcoins in recent months.
Nevertheless, key insights from Santiment indicate a rise in network activity, suggesting a possible change in Ethereum’s market dynamics. While ETH continues to grapple with the challenge of reclaiming the critical $2,500 mark, this period of heightened volatility might offer a strategic investment opportunity.
Investors should view this moment as an opportunity to position themselves for expected future gains. With the current momentum and rising network activity, a significant rally in Ethereum could be imminent, presenting a favorable outlook for those prepared to take advantage of its recovery.
Ethereum Network Expansion: A Positive Development
Ethereum has faced difficulties recently, with traders and investors watching for confirmation that the worst selling pressure and negative sentiment are behind them. A positive sign is the surge in network activity reported by Santiment on X, which may indicate improving market conditions.
On Sunday, typically a day with lower trading activity, Ethereum experienced a remarkable increase in network growth. The total number of new wallets reached a four-month peak, with 126,210 wallets created. This surge in network utility points to a growing interest in Ethereum and may indicate a shift in overall market sentiment.
For Ethereum to maintain this momentum, its price needs to focus on and test higher thresholds, particularly in the local supply area around $2,550. Achieving and holding this price level is vital for Ethereum to regain its strength and foster a sustainable upward trend.
As the broader market enters a consolidation phase, investors and traders are keenly observing for additional signs of strength. The rise in network activity could be an early indicator of a potential rally, making it crucial to monitor Ethereum’s price movements and broader market trends.
ETH Price Movement
Ethereum is currently priced at $2,349 after a 10% rebound from yearly lows of $2,150. This increase follows weeks of relentless selling pressure, positioning ETH at a crucial point in its price trajectory.
Attention now turns to the 4-hour 200 exponential moving average (EMA) set at $2,576. For Ethereum to sustain its positive momentum, it must not only exceed this critical technical threshold but also close above it convincingly.
Since late July, ETH has had difficulty maintaining a position above this EMA, which is a significant resistance level. The inability to close above the EMA during this time has underscored a bearish trend in the short term. A successful breakout and a convincing close above this level could indicate a possible trend reversal and initiate a more sustained upward movement.
However, the situation could deteriorate if Ethereum fails to maintain its current price levels and falls below $2,349. A decline beneath this support level could result in a deeper correction, possibly revisiting yearly lows or moving to even lower levels soon. Such a development could negatively impact ETH holders, creating increased volatility and risk.
Careful monitoring of ETH’s interactions with the 200 EMA and its ability to remain above current levels will be vital for evaluating the near-term outlook and possible trend changes.
Featured image from Dall-E, chart from TradingView
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