Ethereum Price: $5K Rally Incoming? Or a Deep Dive Below $4K?
Ethereum (ETH) has seen a whirlwind of activity recently, leaving investors wondering what's next. After a brief surge above $4,700, ETH struggled to maintain its bullish momentum, triggering risk aversion among traders as the unstaking queue swelled to $12 billion. However, strong network usage and ETH's growing role as a corporate reserve asset offer a glimmer of hope for a potential breakout above the coveted $5,000 mark.
On-Chain Activity Signals Potential Upside
Data reveals a significant jump in Ethereum network fees, increasing by 35% compared to the previous week. Active addresses also saw a 10% rise. This robust on-chain activity is crucial for supporting Ether's price, as every transaction and data operation requires payment in ETH. Elevated fees also boost validator yields, strengthening network security and contributing to Ethereum's burn mechanism, which gradually reduces supply.
Validator Queue and Strategic ETH Reserves
While the validator queue showed record demand for ETH to exit staking, creating a substantial wait time, strategic ETH reserve companies are accumulating ETH at an impressive rate. These companies added 877,800 ETH in the past 30 days alone, equivalent to roughly $4 billion at current prices. This accumulation suggests a long-term bullish outlook, potentially offsetting concerns about the unstaking queue.
Price Dips Below $4,550: What's Next?
Recently, Ethereum's price experienced a fresh decline, falling below $4,550. It's currently consolidating but faces the risk of further decline if it breaks the $4,250 support zone. The price is trading below $4,450 and the 100-hourly Simple Moving Average, with a key bearish trend line forming resistance at $4,450. If Ethereum fails to clear the $4,350 resistance, a fresh decline could be imminent, with initial support near $4,250 and major support around $4,220.
Will the Bulls Step In?
Despite the recent dip, a fresh increase is possible if ETH settles above $4,400 and $4,450. A clear move above $4,450 could send the price towards $4,500 or even $4,620. The battle between bulls and bears is on, and the coming days will be crucial in determining Ethereum's short-term trajectory.