Ethereum’s original token, ETH (ETH), could now return to $3,000 in March thanks to a combination of near-term technical, fundamental and sequential catalysts.
ETH Prize Symmetrical Triangle Draws
Ironically, the first Ether bullish review is based on a bearish continuation pattern.
Specifically, ETH fell 50% from its all-time high around $4,650 on December 2, 2021 with the formation of a consolidation channel called the Symmetrical Triangle. Consequently, Ethereum has fluctuated between an upper trend line and a lower up trend line since the beginning of this year.
Ethereum/USD daily price chart with a symmetrical triangle. Source: Trading View
ETH/USD recently tested the lower trendline of the triangle supporting around $2,500 on March 14 after a sharp correction after finding sellers near the 20-day EMA (20-day EMA; green wave in the chart above).
Since then, the price of ETH has fallen by as much as 9.26%, closing above the 20-day EMA resistance on March 16 and approaching $2,750.
A decisive reversal accompanied by increased volume could see Ether see the upper trend line of the triangle as the next upside target near $3,000.
On March 15, Ethereum developer Tim Beiko announced that they had successfully tested the Merge on the Kiln testnet, sparking speculation that the protocol would switch completely from Proof of Work to Proof of Work in the second quarter of 2022.
The euphoria surrounding the merger has been one of the most positive growth opportunities for Ethereum since the first consensus team updates were introduced in December 2020.
Arcane Research indicated in its latest weekly report that a total of 312,000 validators have invested 10 million ETH in the merger – also called Ethereum 2.0 – Smart Contacts.
Nearly $26 billion worth of Ether, representing more than 8% of total working capital, is currently closed. The prospect of more ether being phased out, combined with hopes of increased demand, pushed the price nearly 360% from the December 2020 low to around $525.
Lito Cohen, founder of Crypto Testers, a product comparison platform, expects the launch of the merger to reduce Ethereum’s daily issuance rate from 12,000 ETH per day to 1280, noting that “annual network inflation will drop from 4.3% to 0.43%” . which is equivalent to three bitcoin halves.
Growth in Ethereum supply. Source: Lito Cohen
“And a 0.4% inflation rate excluding EIP-1559’s automatic Ethereum burn ($5 billion has been burned since its launch), and with Ethereum burn, Ethereum will be deflationary,” Quinn wrote.
Positive difference between utility and price
An upward divergence is also emerging between the daily active Ethereum address (DAA) and the price of ETH, according to data from the analytical platform Santiment.
In particular, Ethereum DAA has fallen, but not as much as the 35% price drop over the past four months. This indicates that users continue to interact with the Ethereum network for reasons beyond speculation and trading.
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“ETH is actively handling the divergence while staying in the historically high price zone,” Sentment noted, citing the chart below.
Ethereum DAA price change. Source: Sentiment
“This is a vote of confidence in Ethereum and a statement that it will stay (and grow),” said Michael Pearl, CEO of decentralized application developer Kirobo, adding that growth in the decentralized finance space will drive the price of ETH. up to and with over $3,000.