Ethereum (ETH) has successfully broken through a crucial resistance area and turned it into a support level, signaling a potential for renewed highs this year.
Co-founded by the renowned crypto expert, Vitalik Buterin, ETH is the native token of the Ethereum blockchain.
The migration of the project from the energy-intensive Proof-of-Work (PoW) consensus mechanism to the Proof-of-Stake (PoS) algorithm in fall 2022 was a significant milestone in its history.
The eagerly anticipated April update Shanghai will see the implementation of EIP 4895, an Ethereum Improvement Proposal that will enable staked ETH withdrawals from the Beacon Chain.
As per the technical analysis of the daily chart, Ethereum (ETH) broke out of the $1685 resistance level on March 17, which was followed by a retracement 10 days later to test this level as support (represented by the green icon).
The RSI indicator also broke the bearish divergence trend line (green) and rose above the 50 mark. It, too, was tested 10 days later as support.
If the current growth trend continues, ETH could potentially reach at least $2,000. However, a close below $1685 could result in a drop to the Fibo 0.5 retracement level at $1465.
The longer-term weekly chart also supports the upside prospects of ETH. The price broke through the long-term downward resistance line, forming a bullish candle in the week of March 13-20.
This line has been on the chart for 483 days, and a bullish breakout could potentially trigger a significant rally.
The nearest horizontal resistance is located at $1950, but the next major barrier will only come into play at $2550.
The weekly RSI is also supporting the upside potential as it made a bullish break of its descending resistance line and is holding above 50.
As long as the price remains above the $1685 support level, we can expect ETH to strengthen towards $1950 and potentially to $2550.
In conclusion, the most likely scenario for Ethereum (ETH) is a rise to $1950 and further to $2550. However, a daily close below $1685 will negate this outlook and could lead to a drawdown to $1455.