Ethereum Price Analysis: Bullish Breakout Could Send ETH To $1,900

Since then, the price has jumped up and down but it has been standing below the 21-day EMA during all of this time.

In the past month, ETH has booked a 22.2% loss and has underperformed all other cryptocurrencies in the top 10. During this same period, rival smart contract platforms like Solana (SOL) and BNB Chain (BNB) have performed much better as investors have been quite pessimistic about Ethereum’s outlook.

Even though this blockchain has distanced itself from its competitors in terms of ecosystem growth and market value, its scaling issues have plagued its reputation and have undermined the performance of its native asset.

Ethereum’s dApps Manage to Stabilize Transaction Volumes

Solana, Sui, and BNB Chain all offer lower transaction fees and the power to process more transactions per second (TPS).

The market is waiting for the official implementation of Ethereum’s Pectra upgrade as it could improve the EVM’s ability to scale by prioritizing top validators through a higher staking requirement and giving layer-two protocols like Arbitrum a mechanism to increase their transaction validation speeds.

Interestingly, on-chain data shows that transaction volumes within the Ethereum network have stood at normal levels despite the market’s downturn.

This emphasizes the strength and diversity of its ecosystem, which includes robust decentralized exchanges, liquid staking protocols, yield-farming, and lending platforms.

All of these dApp contribute to generate high transaction volumes every day and stabilize the network’s throughput.

This Needs to Happen to Ignite an ETH Rally

Moving to the charts, Ethereum has entered similar periods of consolidation in the past – two times in the past year and a half to be exact.

In the past two instances, the price rose to a higher high right after it went through a temporary pause.

However, the price had not made a lower low as it has now and this is a reason to be concerned about what could come next for ETH.

The past two times that ETH rose to all-time highs, it took the price 6 months or less to get there after it stepped off oversold territory in the Relative Strength Index (RSI).

As a result of this month’s strong uptick, ETH has now stepped outside oversold as well. Note that the uptrend started after the price climbed above the 21-day EMA. Sure, there were multiple failed breakouts along the way, but they showed that bullish momentum was picking up its pace.

As of today, ETH has not managed to break above its 21-day EMA. Hence, there has been no buy signal yet.

If that bullish breakout occurs, the price could rally to $1,900 first. This is an important area of resistance as this year’s volume profile shows that it was the one with the second highest trading volumes.

If ETH does climb and breaks above that level, this could lead to a strong uptrend as levels above that mark have lower volumes, meaning that bulls will encounter less resistance to push the price higher.

Momentum indicators are favoring a bullish short-term outlook for now but the 21-day EMA is the most critical indicator to watch to determine if the trend is changing.

Meanwhile, a break below the token’s most recent low at $1,375 could plunge ETH to $1,155 and invalidate this scenario.

For now, momentum is on the side of bulls but market conditions are challenging and the macro backdrop is still quite unfavorable so it would be no surprise that ETH drops to lower levels this year if the U.S. economy deteriorates, inflation moves higher, or the Fed decides not to lower rates at all this year.