Traders pushed the price of Ethereum (ETH) close to $4,000 on May 27, with the altcoin up 3.5% on the day.
Ethereum’s strong performance has seen it rise from a low of $3,048 on May 20, rising 27% to reach a 10-week high of $3,964 on May 27, according to data from Cointelegraph Markets Pro and TradingView.
Ether’s performance over the past seven days has been primarily driven by market expectations that a spot Ethereum Exchange-Trade Fund (ETF) will be approved in the United States. Although ETH has performed poorly since approval, a move towards $4,000 is considered meaningful.
Crypto analyst Jelle said Ether has completed a long build-up and the price is ready to enter the “stratosphere” with the approval of a spot Ethereum ETF.
In a May 27 post on
Michaël van de Poppe, analyst and founder of MN Capital, made a similar observation using the weekly ETH/BTC chart. According to van de Poppe, the weekly Relative Strength Index (RSI) has produced a bullish divergence, signaling the beginning of a capital rotation from Bitcoin (BTC) to altcoins after a prolonged cryptocurrency winter.
“It is very likely that the 2.5-year bear market has finally ended for Ethereum.”
“#ETH confirms a breakout of the bullish differential and downtrend,” cryptocurrency trader Matthew Hyland declared in a May 27 post on added.
Fellow analyst Tuur Demeester believes that the euphoria in the Ethereum market has not yet materialized. In a post by X on May 25, Demeester shared the following chart: The ETH/BTC pair “needs to break above 0.06 to turn bullish.”
It is worth noting that at the time of publication, the ETH/BTC pair was trading at 0.056, with the 50-week simple moving average (SMA) providing immediate support.
Price needed to hold the long-term downtrend line (blue) above this support to increase the chances of turning it into support. If this happens, ETH/BTC will face resistance at the 0.06 level, which is accepted by the 200-week SMA.
The chart below shows that a breach of this level does not mean the pair is out of trouble yet. To confirm a breakout, the 100-week SMA needs to flip at 0.063.
Meanwhile, ETH balances on exchanges have been declining over the past 12 months, reaching a six-year low of 13.58 million ETH on May 20, according to data from on-chain metrics provider CryptoQuant.
Declining Ether balances on exchanges indicate that traders have adopted a long-term investment strategy, indicating increased confidence in the long-term potential and value of Ether.
This article does not contain investment advice or recommendations. All investment and trading activities involve risk and readers should conduct their own research when making any decisions.