Ethereum (ETH) just broke past a significant resistance level, exhibiting remarkably bullish behaviour. As a result of the most recent charts’ upward direction, many experts and investors are wondering if the ETH/USD chart will soon cross the desired $3,000 threshold.
The classic sign of a bull market is a sequence of higher lows and higher highs, which is what we observe when we look at Ethereum’s daily chart. The 50-day and 100-day moving averages served as dynamic resistance, but the price has already overcome both.
The volume behind the movement is decreasing, indicating weak momentum, even with the recent upswing. This pattern frequently comes before a period of consolidation, during which the price stabilises and then moves decisively. Investors have to keep an eye out for any potential consolidation, as this would validate the durability of the most recent upswing.
The emergence of Layer 2 solutions (L2s) has been contributing to the dynamics of the market by steadily raising Ethereum network costs. Although L2s are intended to improve Ethereum network scalability and lower costs, the transition phase may cause fees to gradually increase. If users start to object to the increased fees, this increase may cause a standstill in network activity and affect the price of ETH as the network’s usefulness is questioned.
Technically speaking, the relative strength index (RSI) is getting close to overbought territory, which is another indication that a halt in the market may be warranted. The RSI might be reset by a retraction or sideways movement, which would create a more stable base for future expansion.
Ethereum’s situation is complicated by the combination of these technical indications and the underlying background of growing network costs brought on by the use of L2s. The underlying volume and network fee patterns indicate that, before any further notable higher moves are seen, there may be a period of consolidation or possibly a slight pullback, even if the present price action appears favourable for a test of $3,000.
