The Ethereum price is trading with a bullish bias at $1,918 as of 1:30 a.m. EST, up 2% on the day.
ETH started a recovery in mid-October, rallying an impressive 27% from $1,522 to today’s intraday high at $1,929. As a result, Ether’s price is up 21% over the last 30 days and trades 60% above its Jan.1 opening.
Ethereum might maintain the bullish momentum if it clears the barrier at $2,000.
Let’s analyze the price action after the latest recovery and see what factors could lead to a possible price rise above the $2,000 psychological level in the near future.
1. A Significant Support Level
Ether’s price started a recovery wave above the $1,600 and $1,800 levels. The buyers tried to pump the price above $1,950, but they were rejected by supplier congestion around the $1,950 area. At the time of writing, the largest altcoin was still trading below $1,950. Bulls were required to flip this level back into support to secure the upside.
ETH was trading above an important demand area stretching from $,1850. Buyer congestion around the said support level is likely to provide the tailwinds required to propel Ether’s price above the $1,950 resistance level.
Such a move would confirm the start of an uptrend that is likely to take the smart contracts token first above the much coveted psychological level at $2,000, and then to the April range high at $2,140.
Above that, the price of the largest altcoin by market capitalization could rise to confront resistance from the $2,500 level. This would bring the total gains to 30%.
ETH/USD Daily Chart
The Relative Strength Index (RSI) was moving upwards within the overbought region suggesting that the bulls were in full control of the price. Moreover, all the major moving averages were positioned below the price price and were facing upwards, adding credence to the bullish outlook.
Note that these trend-following chart overlay indicators had just sent a call to buy Ethereum on the daily chart. This happened on Nov. 8 when the fast-moving 50-day Exponential Moving Average (EMA) crossed above the 200-day EMA – a golden cross, suggesting that the ETH’s uptrend was strong.
2. IOMAP Metrics
The daily chart above showed that Ether was trading above a key support zone. Included within this area were the immediate support levels from the $1,900 and $1,850 psychological levels. Further down, bears would be confronted by buying pressure from the $1,800 support floor and the $1,700 area where all the major EMAs lie.
This was supported by on-chain metrics from IntoTheBlock’s In/Out of the Money Around Price (IOMAP) model, which showed that ETH sat on relatively robust support. For example, the major support level at $1,850 lies close to the $1,857 and $1,915 price range, where approximately 3.64 million ETH were previously bought by roughly 4.82 million addresses.
Ethereum IOMAP Chart
Any attempt to push the price below the said level would be met by buying from these investors who may want to increase their profits. The ensuing demand pressure would cause Ether to rise even higher.
3. Increasing Total Value Locked
Further validating the positive outlook for Ethereum was total value locked (TVL) data that revealed a bullish bias from on-chain investors. An analysis of Ethereum’s TVL data helps understand investor and developer interest in a blockchain or decentralized application (dApp). TVL is similar to bank deposits for decentralized finance (DeFi) projects and may influence the direction the market takes.
TVL On Ethereum
According to the chart above, there is clear evidence that the TVL on the Ethereum blockchain has been increasing in tandem with the price. DeFiLlama, an on-chain data and market behavior analytics firm, saw the amount locked on the smart contracts network rise from $19.36 billion when ETH price began rising to the current value of $24.46 billion.
This increase in TVL is deemed bullish as it signals an increasing demand amongst large on-chain users.
The post Ethereum Price Prediction: Reasons Why ETH is Primed to Test $2,000 appeared first on Analytics Insight.
Source: https://www.analyticsinsight.net/ethereum-price-prediction-reasons-why-eth-is-primed-to-test-2000/