Ethereum’s native token Ether (ETH) could hit as high as $3,000 in March, supported by a mix of short-term technical, fundamental and on-chain catalysts.
ETH price depicts “symmetrical triangle”
Ironically, the first interim bullish outlook for Ether stems from a bearish continuation pattern
Notably, the 50% plus ETH drop from its all-time high of about $4,650 on December 2, 2021 was followed by the formation of a consolidation channel called a symmetrical triangle. Therefore, since the beginning of this year, the Ethereum token has been fluctuating between a falling upper trendline and a rising lower trendline.
ETH/USD daily price chart with symmetrical triangle. Source: TradingView
ETH/USD last tested the triangle’s lower trendline as support near $2,500 on March 14, following a sharp correction after finding sellers near the 20-day exponential moving average (20-day EMA) ; the green wave in the chart above). s
since then, the price of ETH is up a whopping 9.26% and closed above the 20-day EMA resistance on March 16 to reach close to $2,750.
A decisive rebound move, accompanied by a surge in trading volumes, could have Ether eyeing the triangle’s top trendline as its next upward target near $3,000.
On March 15, Ethereum developer Tim Beiko announced that they successfully tested the “Merge” on the Kiln testnet, sparking speculation that the protocol would switch completely from proof-of-work (PoW) to proof-of-stake. (PoS) in Q2/2022.
And it seems to have worked Post-merge blocks are produced by validators and they contain transactions! https://t.co/xearnsuZFp
— Tim Beiko | timbeiko.eth (@TimBeiko) March 15, 2022
The euphoria surrounding the Merge has acted as one of the main optimistic outlook behind Ethereum’s growth since the introduction of the first consensus layer upgrades in December 2020.
mysterious investigation noted in the latest weekly report that a total of 312,000 validators are betting 10 million ETH on the Merge – also called Ethereum 2.0 – smart contacts.
That amounts to nearly $26 billion worth of Ether, more than 8% of the total circulating supply, now locked up. The prospect of more ether going out of circulation, coupled with hopes of increased demand, have pushed the price nearly 360% from its December 2020 low of about $525 so far.
Lito Coen, the founder of Crypto Testers, a product comparison platform, anticipates Merge’s launch to cut Ethereum’s daily issuance from 12,000 ETH per day to 1,280 per day, noting that the network’s “annual inflation rate will drop from 4.3% to 0.43%” – the equivalent of three Bitcoin halvings.
Ethereum supply growth. Source: Lito Coen
“And the 0.4% inflation rate is without taking into account the automated ETH combustion introduced by EIP-1559 ($5 billion burned since launch), taking into account ETH combustion, Ethereum will be deflationary,” Coen wrote.
Positive divergence between utility and prices
A bullish divergence is also emerging between Ethereum’s daily active addresses (DAA) and ETH’s price, according to to data from analysis platform Saniment.
Notably, Ethereum’s DAA fell, but not as much as prices, which have fallen about 35% in the past four months. That indicated that users continued to interact with the Ethereum network for reasons other than speculation and trading.
Related: How Professional Ethereum Traders Place Bullish ETH Price Bets and Limit Losses
ETH active addresses divergence continues in the area where prices are rising historically,” Santiment noted, quoting the chart below.
Ethereum DAA Price Divergence. Source: Saniment
“This is a vote of confidence in Ethereum and a statement that it is here to stay (and grow),” said Michael Pearl, COO of dapp developer Kirobo, adding that the growth in the DeFi space is pushing the price of ETH would even soar above $3,000.
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