Ethereum’s bullish outlook and strength against the largest cryptocurrency Bitcoin is a force likely to be reckoned with in Q1. Despite Bitcoin price stalling above $52,000 and resistance at $52,800, Ethereum price prediction shows the smart contracts token touching $3,000 for the first time since 2022.
Ethereum’s stellar performance is driven by multiple catalysts, such as the spot ETF hype, the Dencun upgrade, the Bitcoin halving, and Ethereum’s deflationary nature after the Merge.
ETH’s circulating supply is shrinking, as the transaction fee burn program gains traction. The switch from proof-of-work to proof-of-stake meant that some of the fees earned by validators are burned or taken out of circulation. This, along with the increase in staked Ether, is creating a supply and demand imbalance, which continues to boost the bullish trend.
Ethereum Price Prediction: Is The Dencun Upgrade Pumping ETH?
Developers of the second-largest crypto network are working towards the launch of the Dencun upgrade. It will introduce proto-danksharding, a feature that will reduce transaction fees and data availability costs for layer-2 chains.
Dencun will also implement several Ethereum Improvement Proposals (EIPs) to enhance the network’s scalability, efficiency, and security. Anticipated to debut on the mainnet in March, Dencun is a fusion of the Cancun and Deneb upgrades, which will upgrade Ethereum’s execution and consensus layers, respectively.
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Many analysts and investors have started warming up to the idea of Ethereum gaining strength due to the Dencun upgrade. Michaël van de Poppe, the founder of MN Trading Consultancy, argues that the rotation of funds from Bitcoin will also contribute to keeping ETH bullish, especially if BTC encounters “a short-term peak.”
Strength on #Ethereum is likely going to come from the Dencun upgrade, or a short-term peak of Bitcoin.
I’m suspecting both at the same time, and preferably you would want to see Ethereum reclaim 0.06. pic.twitter.com/riVKSvCVAP
— Michaël van de Poppe (@CryptoMichNL) February 19, 2024
Ethereum price, after closing above a key weekly resistance, relevant since March 2022, signals a stronger bullish outlook both in the short-term and long-term.
The uptrend appears to have run into a blockade at $3,000, resulting in a minor retrace to collect liquidity. ETH traded at $2,920 during US business hours on Tuesday, supported by the 0.5 Fibonacci level.
Technical indicators ranging from the moving averages to the Moving Average Convergence Divergence (MACD) indicator are aligned to keep Ether’s uptrend going.
Traders would be on the lookout for a daily close above $3,000 in the coming sessions but most importantly, a weekly candle close on top of the same level.
Attention would then shift to the next critical zones highlighted in yellow and red. A successful retest of this area may trigger FOMO, with more investors buying to ride the trend to $4,000 and later to an all-time high.
Failure to move and hold above $3,000 could keep Ethereum confined between support at $2,400 and resistance at $2,900 ahead of the Dencun upgrade.
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The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
Source: https://coingape.com/markets/ethereum-price-prediction-after-eth-tags-3k-dencun-upgrade-in-play-to-4k/
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