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The price of Ethereum’s native cryptocurrency ETH has exceeded $547. After the breakout, traders are identifying several key resistance levels in the near term.
In the short term, traders generally believe that $600 is the main resistance area for ETH, because this resistance level is also a sign of the beginning of a bearish trend that began in May 2018. Therefore, $600 may become an area of interest for sellers.
However, traders also believe that if ETH exceeds $600, it is likely to enter the range of $700 to $900. Above this, there is almost no resistance until the all-time high.
Weekly price chart of ETH Source: TradingView.com
Ethereum’s outlook remains positive
The Ethereum network has seen many catalysts come into play in recent months.
First, as a large amount of ETH continues to flow into deposit contract addresses, the Ethereum 2.0 network upgrade is underway.
Ethereum 2.0 is a major upgrade that migrates Ethereum from the Proof of Work (PoW) consensus algorithm to the Proof of Stake (PoS) algorithm. Essentially, it removes miners from the network to optimize transaction settlement.
Second, data on the chain shows that whales are continuing to hoard ETH. This trend coincides with the reduction of ETH reserves on exchanges, especially as more and more holders deposit ETH into deposit contracts. Santiment’s researchers wrote when ETH first broke $500:
“Following the footsteps of BTC, ETH also reached a 29-month high of US$509. June 21, 2018 was the last time this second-ranked asset reached such a high price. The top ten holdings of ETH The increase in the number of holders, coupled with the decrease in the supply of ETH tokens on exchanges, has driven this increase.”
Ethereum’s strong fundamental catalyst and favorable technical structure make traders optimistic about the recent price trend of ETH.
Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said that ETH may fall back after reaching $600. However, the trader said that above this, the road to $900 to $1,000 is open.
Potential Ethereum price cycles with resistance levels Source: TradingView, Michael van de Poppe
The anonymous trader “Rookie” also said that ETH may rise to $700 before the end of this year. Since July 2020, ETH has seen a parabolic upward trend, which increases the possibility that ETH will rise in the long-term until 2021.
Will ETH increase with the price of Bitcoin?
During the 2017 increase, the price of Bitcoin on major exchanges was close to $20,000, and altcoins were relatively stagnant. In January 2018, after Bitcoin reached its peak, the prices of ETH and other major cryptocurrencies experienced explosive fluctuations.
ETH has seen a new upward momentum in 2021, which will be consistent with the trend seen in the post-halving cycle in 2017. Although there is little historical data indicating that ETH and other altcoins will follow the same trend as three years ago, the argument that altcoins will rise in January 2021 remains strong.
In order for ETH to see a long-term upward trend, it first needs to recover the $600 resistance level, because many analysts believe this level is the biggest threat in the near term.
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