On Friday, Ethereum experienced a significant surge, surpassing the $2,000 resistance level with a more than 10% increase in just a few days. This growth was primarily driven by the rising popularity of decentralized finance (DeFi) applications, which are built on Ethereum's blockchain and provide various financial services without intermediaries.
The anticipated Ethereum 2.0 upgrade also played a key role in this surge. The upgrade promises enhanced network scalability and security, sparking optimism among investors and leading to increased buying pressure on Ethereum.
From a technical perspective, Ethereum's price was trading above $2,050 and the 100-hourly Simple Moving Average, indicating a positive trend supported by a short-term rising channel. However, the cryptocurrency faced a significant hurdle at the $2,135 resistance level. If it fails to overcome this resistance, it could lead to a downside correction with immediate support levels at $2,115 and $2,080 and main support at $2,000.
The price surge followed Ethereum's milestone breakthrough on Thursday when it broke a key resistance level and witnessed a price surge of over 2%, ensuring the token's value stayed above $1,900 and traded at $1,914.42.
Market indicators played crucial roles in these developments with the bullish Moving Average Convergence Divergence (MACD) indicating favorable market conditions and Bollinger Bands signaling high price volatility. Ethereum's Relative Strength Index and Chaikin Money Flow also remained high.
Despite facing high selling pressure on Wednesday that led to a sharp drop in weighted sentiment during its rally, data from CryptoQuant on Thursday showed optimism with high active addresses and transferred volume for Ethereum. In the derivatives market, dominant buying sentiment was indicated by a green funding rate and taker buy/sell ratio. Cubic (NYSE:CUB) Analytics confirmed these developments as a milestone breakthrough for the cryptocurrency.
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