What is happening with the Ethereum (ETH) rate amid Zhejiang testnet update

Ethereum (ETH) price is trading just above the key level of $1664. If the price can confidently gain a foothold above it, this will be a positive signal for the bulls

On January 31, Ethereum developers announced the launch of the Zhejiang test network, which will allow testing the functionality of withdrawing coins from staking on Beacon Chain. At that time, ETH did not react to this news in any way.

At the same time, as the latest statistics show, the whales seem to be losing interest in Ethereum, and more participants in the futures market are betting on the fall in the price of ETH in the coming weeks.. However, the situation could change quickly if the Zhejiang network testing and the subsequent launch of the Shanghai update proceed without major technical problems.

In the meantime, on February 7, the first simulation of the withdrawal of ETH from staking was successfully carried out on the testnet. The upgrade was activated in the 1350 era and launched the Capella fork. The next network update should take place in the coming weeks. These will be upgrades of Sepolia and then Goerli.

Ethereum has reached a critical level

Technical analysis results show that ETH broke through a descending resistance line on January 11 and has been actively strengthening since then.. As a result, on February 2, the price reached a maximum of $1,712.. However, here the token formed a shooting star candlestick pattern (red icon) and tested the $1664 resistance.. This is a critical area, since the Fibo 0.618 retracement level and horizontal resistance are located here.

However, Ethereum then again felt the ground under its feet and made another attempt to break through, forming a bullish candle on February 7th.

Daily RSI gives interesting signals. It looks like the price of ETH has made a bullish breakout of the bearish divergence trendline (green). In this case, a confident recovery above the $1664 resistance area and growth towards $2000 is likely.

On the other hand, another pullback from this resistance area could trigger a drawdown to the nearest Fibo support at $1461.

Source: TradingView The fate of ETH may be decided in the near future

On the 6-hour chart, you can see that since January 18, the price has been trading inside an ascending parallel channel.. Although such patterns are considered bearish, ETH is at the top of the channel, which indicates the chances of the coin for a bullish breakout.

The channel coincides with a key resistance area on the daily chart, so the fate of this short-term pattern may decide the fate of Ethereum's longer-term trend in the near future.

Source: Trading View

Thus, the further direction of ETH movement is still unclear.. The movement vector will be determined after the price exits the current pattern, depending on whether we see a bullish or bearish breakout. In the first case, the price may rush to the highs around $2,000, in the second, it can test $1,461 again.

Read also: How the Shanghai update will affect Ethereum: opinions


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