Ethereum (ETH) price has established a solid support level near $2,972, which could soon lead to a bullish bounce towards all-time highs.
Amid the cryptocurrency correction, Ethereum (ETH), the second largest digital asset with a fully diluted value of approximately $360 billion, has hit prices below $3,000 several times over the past five weeks. On a daily basis, the price of ETH against the US dollar is forming a descending triangle with a solid base around $2,972.
A breakout on either side would lead to massive price movements as the trading instrument approaches the edge of consolidation. According to veteran analyst Peter Brandt, Ethereum price has not shown any clear movement in price action studies.
ETH $ETH This is becoming a very interesting chart to me.
The pattern is too long to be considered a flag, but it is most likely a channel labeling.
With this chart you can go either way pic.twitter.com/EeSa7SyAmA— Peter Brandt (@PeterLBrandt) May 9, 2024
Ethereum is no longer ultra sound money
As Coinspeaker recently reported, Ethereum is gradually losing its ultra-sound currency status following the recent Dencun upgrade. In particular, the Ethereum network has been collecting increasingly smaller transaction fees from layer 2 projects since the Dencun upgrade in March 2024.
“The Dencun upgrade caused ETH to re-inflate, potentially killing talk of an “ultra-sonic” currency as the amount of transaction fees structurally depleted was lower, which had the effect of preventing the total supply of ETH from decreasing enough to keep it deflationary. Yes,” said Julio Moreno. CryptoQuant’s head of research said:
According to on-chain data provided by Etherscan, the amount of Ether burned on Wednesday, May 8, 2024 is approximately 547. In comparison, the Ethereum network was burning up to 7,000 units per day before the Dencun update.
Nonetheless, the Dencun upgrade was necessary to make the Ethereum network more competitive against other layer 1 (L1) chains such as Solana (SOL), Toncoin (TON), and BSC. Additionally, most web3 projects, including the Gamifi platform, require fast and very cheap transactions to seamlessly onboard more users.
political entanglements
Ahead of the upcoming final decision on the VanEck spot ETH ETF on May 23, the Ethereum network finds itself in the middle of a huge political debate in the United States. As Coinspeaker explains, the U.S. Security and Exchange Commission (SEC) has maintained that Ethereum is a security and not a commodity like Bitcoin.
As a result, Wall Street analysts believe the US SEC will reject 12 applications for a spot Ether ETF later this month. Meanwhile, former US President Donald Trump has reassured the cryptocurrency community that he supports all altcoins and that government resistance will end once he is elected POTUS later this year.
The spot Ether ETF decision is likely to follow the same path as Bitcoin, especially after Consensys filed a lawsuit against the US SEC.
Ethereum price is gradually following Bitcoin price movements, so it is safe to assume that the top altcoin will soon hit new all-time highs. However, Ether price on daily chart needs to recover the support level of 50 MA (moving average) to ensure bullish momentum.
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