Ethereum Price Prediction: ETH/USD spectacular rally to new 2020 highs

Ethereum price has made its way above $450 after putting August’s high at $447 in the rearview. The surge has taken place in the shadow of DeFi’s new darling Yearn.finance’s surge to highs above $40,000. The Defi ecosystem continues to sell Ethereum as the go-to platform for smart contracts and decentralized applications. In spite of the Ethereum protocol struggle with congestion and high transaction fees, the DeFi ecosystem continues to surge.

At the time of writing, ETH/USD is exchanging hands at $461. This follows a minor retreat from the two-year high at $466. The meteoric rally is highlighting the influence DeFi is having on Ethereum. Note that while ETH rallies, Bitcoin continues to stall under $12,000 only being able to break above $12,800 once in the past few days.

Some DeFi protocols are performing massively well. For instance, UniSwap, whose value of locked funds has grown by 50% in the last 24 hours while Balancer has seen the highest growth at 68.17% to $703 million.

Ethereum technical analysis

The support at $370 proved essential to Ethereum in August. Despite the spiking price actions, Ether ended up in frequent losses below $400 but bulls somehow always held onto the support at this level. The recent surge above $400 has been significant to the extent of propelling Ethereum to new 2020 highs on the first day of September. The action above $500 is expected in the coming days which will launch Ethereum’s bullish case towards $1,000.

For now, holding above $460 is the bulls’ priority. However, the technical picture shows that gains are likely to continue in the short term. The MACD is moving higher in the positive region further cementing the buyers’ intense influence over the price. On the other hand, investors must be aware that a reversal is also in the picture especially with the RSI currently overbought.

ETH/USD 4-hour chart