Ethereum (ETH) Heads Towards a Strong Breakout

Ethereum has been under a similar downtrend rally as major cryptocurrencies but holds onto its second position in terms of market capitalization. Currently, there seems to be no challenger to the ecosystem developed by ETH in recent days with the incorporation of its upcoming ETH 2.0 upgrades. While the price of ETH has historically correlated with its hash rate, there has been a subsequent dip in gas fees in the last six months. This indicates an opportunity for onboarding more cryptocurrencies, Dapps, and Defi projects on the ETH ecosystem, which could be greatly helpful in pushing a fresh rally. 

The previously planned Arrow Glacier Upgrade of Ethereum has been postponed to June 2022. The layer-2 scaling of the ETH ecosystem has been supported by both the Zero-Knowledge Rollups and Optimistic Rollups. Both these rollups have significantly increased the speed of validation, allowing more partners to explore the application of ETH layer 2 in their respective validation requirements. With the Arrow Glacier Upgrade, ETH will be switching to an entirely proof of stake ecosystem, which will be using sharing as a tool to feed further scalability and address the speed of validations.

ETH Price Analysis 

Ethereum has been under a downtrend, but the number of wallets holding ETH has increased to an all-time high. This could further aid in a sudden price rise as developers get closer to the proof of stake switching timeline.

ETH Chart

Ethereum’s rise in 2021 has been nothing short of astonishing, as it moved up from under $2000 to close to $5000. Despite the factors at play, ETH has breached its 200 DMA level at the beginning of 2022 and since then has failed to maintain a positive stance. Subsequently, ETH has also been trading below its 30 days moving average and seems to be a consolidative step that could offer an uncertain breakout. 

With the current trendlines, a breakout could be expected by the beginning of April 2022, which coincides with the expected proof of stake transition. Even RSI has been dangling by the thread as sudden buying and selling dips have affected the price momentum of ETH. While volume at Ethereum has remained consistent in the last couple of months, January end saw a massive boom, and such booms will be instrumental in supporting the uptrend rally of ETH prices. According to the technical analysis and ETH price prediction, the perfect time to buy ETH for holding would be the trading zone between the 30 and 200 DMA curves.

ETH Price Chart

Ethereum seems to be undergoing a much more decisive price action in its hourly charts. Over its four-hour charts, we can witness a strong momentum. Although, the price has moved downhill by close to 500 points compared to the February 09, 2022 levels. Currently, ETH is trading at a dip of 15%, which seems retractable considering the rising RSI levels. RSI is rising from the lows of oversold zones and has reached neutral levels. At the same time, it can be expected to cross the 70s mark on the RSI histogram, indicating a high probability of a positive breakout.

Stephen Beck writes about US economy, finance, business, banking, taxes and more. He first worked as a freelance writer for regional newspapers then joined FinanceOrange team as a full-time news writer. He spends his free time eating and in sports.

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