Key takeaways:
- Ether breaks multimonth downtrend as traders target $3,000 ETH price.
- Ethereum TVL surges 41% to $52.8 billion in 30 days, with a 22% rise in daily transactions to 1.34 million, signaling strong network recovery.
- Technicals show ETH price faces major resistance at $2,100-$2,800.
Ether is setting up for a recovery toward the $3,000 psychological level, backed by recovering network activity, increasing total value locked (TVL), and strong technicals.
Ether Price Seeks a Return to $3K
Ether (ETH) looks to end its downtrend that has been in play since mid-December after it turned away from its 10-month high of $4,100. Analysts note that the recent market dynamics reflect a potential shift, with significant buying interest emerging.
Crypto technical analyst Mikybull Crypto shared a chart illustrating ETH’s break above a six-month descending trendline, emphasizing that $2,000 and $2,250 are critical resistance levels. This breakout has sparked renewed optimism in market participants.
“ETH breaking out.”
Ether’s price broke above the downtrend line at $1,600 on April 22 when cooling macroeconomic tensions sparked a marketwide recovery. The 50-day simple moving average (SMA) at $1,775 is now acting as immediate support for Ether’s price.
The relative strength index (RSI) has risen sharply from 56 to 66 over the last 24 hours, indicating that bullish momentum is gaining traction. Key levels to watch for upward movement are the 100-day SMA at $2,100 and the supplier congestion zone between $2,500 and $2,800, where the 200-day SMA lies. Overcoming these barriers will likely push ETH prices higher, with $3,000 representing the short-term target for bullish traders.
Market analysts project that the ETH/USD pair is primed for a bullish reversal, with potential targets between $2,500 and $3,500.
Crypto Claws (@cryptoclaws_) tweeted: “$ETHUSD 1D chart looking primed for a massive bullish reversal! Potential short-term dip to $1450, but that’s just fuel for the next leg up. Targets: $2500, then $3500!”
Meanwhile, other analysts point to the recent upgrade momentum as a catalyst for price movements, suggesting that ETH could target $2,150 to $2,700 in the coming weeks.
Ethereum Onchain Metrics Show Strength
Ethereum maintains its status as the leading layer-1 blockchain by total value locked (TVL) and ranks second in decentralized exchange (DEX) volumes. Notably, TVL has risen from $44.5 billion on April 9 to $52.8 billion on May 8, marking an increase of over 41% in just 30 days.
Further positive indicators include a 50% increase in deposits on BlackRock BUIDL and significant growth across various DeFi platforms. Ethereum’s daily transaction count has risen by 22% over the past month, reaching 1.34 million transactions.
However, a concerning statistic is the 95% drop in Ethereum fees year-to-date, which may imply that the rise to $3,000 could take longer than traders might anticipate. Low transaction activity affects ETH burning rates, rendering the asset increasingly inflationary as new coins issued for staking rewards outpace the network’s deflationary mechanisms.
Additionally, US-listed spot Ether ETFs have seen significant net outflows, adding to the uncertainty surrounding Ethereum’s imminent recovery.
This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.
