Ethereum price eyes $2,500 mark as Solana market takes a breather
- Ethereum price looks poised for a continuation of the uptrend, with several technical indicators favoring the upside.
- Meanwhile, Solana price is likely to face a correction after a multi-month period of SOL being massively overbought.
- ETH could rise almost 7% to hit $2,500 amid rising momentum and a possible pending buy signal.
- A break and close below the critical support at $2,147 would invalidate the bullish thesis.
Ethereum (ETH) price looks poised for a shine after a prolonged contention against its peer in the Layer 1 space, Solana (SOL). This brings to mind previous reports where Solana founder Anatoly Yakovenko said he envisions a future where SOL and Ether co-exist, urging that the whole narrative of one ecosystem kills the other be binned.
Also Read: Crypto hack: Ethereum, Solana DeFi trading platform Thunder exploited for $239,000
Ether displays upside potential as Solana price shows weakness
Ethereum (ETH) price has spent the better part of December consolidating between the critical support at $ 2,147 and the $2,380 resistance level. Based on technicals such as the Relative Strength Index (RSI), the largest cryptocurrency may be poised to shine, at least for the short term.
Meanwhile, the SOL market is exhibiting weakness, as the technical indicators hint at a possible dip in the Solana price. It comes after a prolonged period of SOL being massively overbought, indicated by the presence of the RSI above the 70 level since October 18, when the markets turned bullish. This preceded a correction.
SOL/USDT 1-day chart, ETH/USDT 1-day chart
Ethereum price outlook with ETH shining at Solana’s expense
After Solana price’s epic surge across the fourth quarter, the SOL market is taking a breather, with capital flowing into Ether. With this, Ethereum price looks ready to shine at the expense of Solana.
The RSI is northbound, suggesting rising momentum. The Awesome Oscillators (AO) indicator remains in the positive territory, adding credence to the bullish thesis. Increased buying pressure above current levels, therefore, could see Ethereum price rise, potentially flipping the $2,380 resistance level to a support before testing the $2,403 range high.
In a highly bullish case, the gains could extend for Ethereum price to tag the forecasted $2,500 psychological level, in a move that would constitute a 7% climb above current levels.
ETH/USDT 1-day chart
On the other hand, if the $2,380 roadblock holds as resistance, the ensuing rejection could see Ethereum price lose the critical support at $2,147, below which the bullish outlook would be invalidated. In the dire case, Ether market value could descend to test the supply barrier that now acts as a bullish breaker between $2,049 and $2,107.
A break and close below the midline at $2,075 would confirm the continuation of the downtrend, with Ethereum price likely to spiral towards the $2,049 support, levels last tested in November.
Ethereum FAQs
What is Ethereum?
Ethereum is a decentralized open-source blockchain with smart contracts functionality. Serving as the basal network for the Ether (ETH) cryptocurrency, it is the second largest crypto and largest altcoin by market capitalization. The Ethereum network is tailored for scalability, programmability, security, and decentralization, attributes that make it popular among developers.
What blockchain technology does Ethereum use?
Ethereum uses decentralized blockchain technology, where developers can build and deploy applications that are independent of the central authority. To make this easier, the network has a programming language in place, which helps users create self-executing smart contracts. A smart contract is basically a code that can be verified and allows inter-user transactions.
What is staking?
Staking is a process where investors grow their portfolios by locking their assets for a specified duration instead of selling them. It is used by most blockchains, especially the ones that employ Proof-of-Stake (PoS) mechanism, with users earning rewards as an incentive for committing their tokens. For most long-term cryptocurrency holders, staking is a strategy to make passive income from your assets, putting them to work in exchange for reward generation.
Why did Ethereum shift from Proof-of-Work to Proof-of-Stake?
Ethereum transitioned from a Proof-of-Work (PoW) to a Proof-of-Stake (PoS) mechanism in an event christened “The Merge.” The transformation came as the network wanted to achieve more security, cut down on energy consumption by 99.95%, and execute new scaling solutions with a possible threshold of 100,000 transactions per second. With PoS, there are less entry barriers for miners considering the reduced energy demands.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
