Ethereum (ETH) has gone up by 4.6% in the past 24 hours and currently sits above $2,600 as trading volumes have increased by nearly 45%.
The price of ETH has been consolidating lately after the token experienced significant selling pressure once it tagged the $2,750 level.
The Pectra upgrade, along with the market’s overall recovery, has catalyzed a strong move upwards for ETH lately and managed to double its price in roughly a month.
Pectra improves the Ethereum network’s efficiency and scalability by introducing further incentives to validators and increasing the number of blobs that can be added to an ETH block.
Blobs are datasets used by layer-2 chains primarily – e.g. Arbitrum – to process transactions at a lower cost. The maximum number of blobs was raised from 6 to 9 to improve the efficiency of L2s.
In addition, ETH’s price could become a deflationary token as a result of Pectra as a portion of gas fees will now be burned to limit the rate at which ETH’s circulating supply grows.
If this growth rate turns negative, it could have a positive impact on the token’s price in the near term.
Ethereum Could Rise to $3,000 After This Strong Buy Signal
In the past 30 days, ETH has beaten all other top 5 cryptocurrencies by producing gains of 42.6%. Can this winning streak continue and, perhaps more importantly, can ETH climb to $3,000 and beyond during this rally?
The price action shows that ETH’s exponential moving averages (EMAs) sent a strong buy signal both on May 17 and 27 as the 9-day EMA and the 21-day EMA crossed above their longer-term peer – the 200-day EMA.
This crossover is known as a ‘golden cross’ and it tends to anticipate a favorable change in an asset’s short-term trend from bearish to bullish.
In ETH’s case, the last time the 21-day and 200-day EMAs posted a ‘golden cross’, the token rose by 19% less than a month later.
Momentum indicators don’t seem to favor a bullish outlook at the tim,e as they have been trending lower in the past few days. However, this is consistent with ETH’s latest price action, which shows that the market has entered a stage of consolidation as it prepares for the next move.
Consolidations tend to be interpreted as ‘accumulations’ as well, meaning that late buyers get the chance to scoop up the asset before its next leg up – or down.
If the price breaks out of its consolidation rectangle, this would confirm a bullish or bearish outlook, depending on the direction in which it moves.
A 19% gain for ETH at this point would mean a push above the $3,000 psychological mark. This is still the outcome with the highest odds, but savvy traders may wait for a breakout to confirm this buy signal.
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