Ethereum Price Prediction: ETH on the cusp of a rally for $420


  • Ethereum is trading at the apex of a descending triangle whose breakout could catapult the price above $400.
  • The on-chain analysis highlights the largest resistance zone between $376 and $386.
  • Consolidation is likely to take precedence at the current price level, especially with the RSI leveling at the midline.

Ethereum traded within a whisker of $490 at the beginning of September. However, the trading in the last couple of weeks has mainly been lethargic, chiefly regarding recovery. Ether refreshed lows of $310 on September 5 before embarking on a recovery mission. On the upside, gains have hit highs above $390 on several occasions, but the resistance at $400 has not wavered, not even slightly. Support at $360 has also been confirmed in multiple instances. In the meantime, Ethereum is trading at $374 amid the pivotal price action at $380.

Ethereum 1-month chart

ETH/USD price chart

Will Ethereum 2.0 fix the existing scalability challenge?

Ethereum 2.0 release seems imminent by the end of the year, as recently discussed. Its launch is expected to be a significant boost for the smart contracts network as well as the value of Ether. On the contrary, some analysts argue that the impending protocol may not fix the high transaction fee problem.

The Ethereum network is congested now more than ever. The decentralized finance (DeFi) ecosystem continues to expand daily. High gas fees have, however, been constant on the network. The users in the DeFi ecosystem eagerly wait for the launch of Ethereum 2.0. They hope that the new network will bring down the exorbitant fees, ensuring sustainability. According to Alex Kruger, an economist and a trader, the growth in DeFi is likely to overshadow the impact of ETH 2.0 as far as scalability is concerned.

Ethereum breakout to $420 impends

Ethereum is trading within the confines of an ascending triangle. The price action comes after last week’s rejection from levels above $390. On the downside, support at $360 has been keen on keeping bears in check. Consolidation seems to be taking precedence, especially with the Relative Strength Index (RSI) holding at the midline.

ETH/USD daily chart

ETH/USD price chart

A triangle breakout aiming for highs above $450 awaits Ether. However, the 50 Simple Moving Average (SMA) must first be flipped into support. The move will allow bulls to shift their focus to $400 immediately. On breaking the stubborn resistance at $400, more buyers could be encouraged to join the market, thereby creating more volume for gains above $420 and $450.

Ethereum Litmus Test: On-chain analysis

Ethereum is facing the most challenging resistance between $376 and $386, according to the on-chain data provided by IntoTheBlock. The range is the largest supply zone, mainly because of the 1.35 million addresses that previously purchased 13.38 million ETH in the area. In the event buyers flip this zone into support, a breakout above $400 would be unstoppable with Ether aiming for $420.

Ethereum IOMAP chart

ETH IOMAP

It is also important to realize that Ethereum is not strongly supported. However, the most significant support lies between $363 and $374, an area where 694,330 addresses bought 2.6 million ETH. In case the support is shattered, ETH/USD could explore the rabbit hole to the next critical support zone between $318 and $330. Besides, the number of new addresses created on the Ethereum network keeps rising as observed from data provided by IntoTheBlock. An increase in the number of new addresses within a network suggests an upward trend is soon starting or resuming.

Ethereum new addresses chart

ETH new addresses chart

Subsequently, Ethereum whales seem to be increasing their holdings as per on-chain metrics by Santiment, a leading blockchain data analytic platform. Wallets holding between 100,000 and 1,000,000 coins increased from 157 million on September 11 to 160 on September 18. In other words, large volume holders within the Ethereum network believe that ETH is bound to recover to highs above $400 in the near term.

Ethereum holder distribution

ETH holder distribution

Looking at the other side of the fence

Ethereum seems to be poised for a breakout that could easily take down the resistance at $400 and start the journey towards $500 afresh. However, it is vital to note that if the resistance at $376 - $386 remains intact, sellers could regain control over the price because buyers will be quite exhausted. A reversal from the resistance level might extend past the support discussed between $363 and $364, hence completing the bearish case eying a freefall to the next critical support at $318 - $330.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Chainlink price ready to reverse, 30% upswing likely for LINK

Chainlink price seems ready for a reversal of its two-week downswing as it attempts to create a higher high. This outlook is also supported by on-chain metrics, which suggest the possibility of accumulation at the current levels for LINK.

More ChainLink news

VeChain price eyes 20% upswing as VET bounces off the buy zone

VeChain price has been on a downtrend for the past three weeks and is showing signs of a reversal. Clearing a crucial barrier that VET is currently grappling with will confirm the start of this uptrend. VeChain price dropped 44% from $0.18 to $0.10 between ...

More VeChain news

Cardano price positioned for bullish reversal, with 100% gains in sight

Cardano price action has been some of the most dismal and disappointing out of all the major cryptocurrencies. But Cardano’s fortunes are about to change. Cardano price has been a consistent loser over the past three months.

More Cardano news

Shiba Inu attempts to breakout towards $0.0000750, SHIBA bulls look to resume uptrend

Shiba Inu price has likely found a bottom and is likely to begin the next phase of a new upswing. A double-bottom was formed at $0.0000375 and it held as support.Shiba Inu price has ...

More Shiba Inu news

Cyber Monday 2021 Discounts!

Glued to your trading screen on Cyber Monday? Upgrade your skills by signing up for FXStreet’s Premium service, offered at a discount of up to 50%. Fellow traders have already taken advantage of Black Friday profits. What about you? 

Subscribe now!

BTC

ETH

XRP