Ethereum (ETH) is currently trading near a critical level of diagonal and horizontal resistance, and its failure to break through this level could result in a significant price increase. The cryptocurrency has been improving its deflationary characteristics, with its supply decreasing by $40 million since it switched to the Proof-of-Stake consensus algorithm, which is equivalent to 32,600 ETH tokens.
This has led to an increase in popularity of staking, with over 7 million coins currently locked in liquidity protocols. Lido Finance is currently the leader in this segment, accounting for over 70% of all staking ETH tokens.
The technical analysis of Ethereum’s weekly chart shows a relatively bullish picture, with the formation of a bullish engulfing candlestick last week. However, the price has yet to break through the descending resistance line, built from the historical maximum. The weekly RSI has broken through its descending resistance line, which is often followed by a bullish breakout and price increase. If this occurs, ETH could head towards $2,000. On the other hand, a bounce could cause the price to fall towards $1,200.
Source: TradingView ETH is trading at an important level
ETH is currently trading within the 0.618 Fib resistance area at $1660, which has been a key resistance level since November 2022. The daily RSI is showing a bearish divergence but has already broken above the bearish trendline. The index is currently above 50, which can be regarded as bullish for the token. If the price of ETH continues to rise, the next resistance will come into play at $2,000, while a rebound could cause the price to fall towards the nearest support at $1,520.
Source: Trading View
Based on the bullish picture on the weekly timeframe and the bullish breakdown of the RSI, the most likely scenario is a rise towards $2,000. However, a break below $1,520 would cancel the bullish scenario and could trigger a fall towards $1,200. It is important to note that all information contained on our website is published in good faith and objectivity and is for informational purposes only. The reader is solely responsible for any actions taken based on the information received.