Ethereum Breaks Through $1,800, Will the Rally Continue?

Driven by the increase in on-chain activities and the upcoming Shanghai upgrade, Ethereum finally broke through. Bitpush terminal data showed that shortly after hitting a low of $1,730 in the previous trading day, Ethereum jumped to a year-to-date high of $1,850, the highest level since August last year, and then fell back to around $1,810 during the closing hours of U.S. stocks. Ethereum's market value is currently about $221 billion, with a 24-hour trading volume of $11.8 billion, the highest in recent weeks.

Upcoming Shanghai Upgrade

Bitpush previously reported that the Shanghai hard fork was originally scheduled to begin on March 14. On March 2, Ethereum developers announced that the hard fork would be postponed to April.

Some analysts believe that the Shanghai hard fork will not bring about huge selling pressure, but Ethereum may remain volatile before the upgrade. Max Kalmykov, CEO of trading automation platform Bitsgap, predicts that Ethereum will continue to remain volatile, but still bullish, saying in a tweet: "Ethereum is often called the "silver" in the crypto space and is a leader in the blockchain field. The upcoming Shanghai upgrade may cause significant market volatility; however, Ethereum's recent breakthrough above the $1,400 resistance level suggests that its value may continue to climb."

In addition, Ethereum is heading towards deflation, and reduced supply and increased market demand will be good for price increases. Ultra Sound Money data shows that as of March 23, ETH 7-day destruction reached 1,755. Since the London upgrade that began on August 6, 2021, 1% of the total supply of Ethereum has been destroyed, which is equivalent to destroying more than 1,853 ETH in 595 days.

Arbitrum Airdrop Increases Market Volatility

The token airdrop of Arbitrum, the largest L2 network on Ethereum, has caused a sensation on social media. As more users and developers flock to the platform, demand for ARB tokens is expected to rise, which may cause short-term price fluctuations for Ethereum and ARB. Because the fee for applying for ARB airdrops on the Arbitrum network is paid in Ethereum, the Ethereum gas cost rises when users rush to claim the airdrop.

Addresses holding more than 0.01 ETH have reached an eight-month high

A positive indicator for Ethereum’s performance is the increase in the number of addresses on the network. According to data from Glassnode , addresses holding more than 0.01 ETH have reached an eight-month high.

According to CryptoQuant analyst crypto sunmoon, the price drop of Bitcoin and Ethereum from March 9 to 13 caused a rapid reduction in exchange reserves, which may be "smart" investors who bought low in fear, but Ethereum did not rise significantly relative to Bitcoin at the time, and the withdrawal amount did not return. The analyst believes that when Bitcoin's rise is completed, investors can expect a strong rise in Ethereum.

Daily chart shows an uptrend

Crypto analyst Ann Mugoiri believes that from a technical point of view, Ethereum’s next resistance level is $1,853. If this level is broken, it may climb to the $1,900 mark in the near future.

Analysts said that the Bollinger Band indicator in the daily chart indicated an upward resistance of $1,884 and a downward resistance of $1,406, and the relative strength index (RSI) value was 61.11, showing that the market was still indecisive and bulls needed to grasp the trend.

The 4-hour chart shows that bulls are still active and if they can take control, further gains are expected in the short term. The ETH market opened at around $1,736 and has been trading above $1,800 since then, which is an important support level. The moving average indicator is at $1,774, suggesting that the market may continue to break in the near future. The next resistance level is at $1,853, and if Ethereum breaks above this level, it may soon climb to the $1,900 mark.