Three market catalysts suggest that Ethereum’s native token, Ether (ETH) is well positioned to hit $4,000 this month.
Google searches for “Ethereum meltdown” skyrocket
Internet user interest in the upcoming Ethereum network upgrade, dubbed “the merger” or “the Merge,” spiked sharply in the week ending April 2as shown by data from Google Trends.
Searches for the keyword “Ethereum Merge” achieved a perfect Google Trends score of 100 over a 12-month period, and most of the traffic came from the United States, Singapore, Canada and Australia.
The Merge or Fusion, also called ETH 2.0, refers to the completion of the Ethereum network to Proof-of-Stake (PoS) from Proof-of-Work (PoW), a development that had been touted as one of the main catalysts behind Ether’s rally in recent weeks, from nearly $2,500 on March 14 to over $3,500 this week.
The bullish outlook stems from Merge’s proposal to reduce the Ether issuance rate, leading to a potential supply spike in the total number of ETH in circulation.. With PoW mining, the supply of ETH has grown by 3% every year.
The increased public interest in the “Ethereum Meltdown” suggests that there is a growing buzz among cryptocurrency investors and traders as the Ethereum upgrade approaches. Kiln’s launch last month is the last public testnet before the entire network goes PoS sometime this year.
I think we see a drive towards $4000 soon as long as price action remains above this support @ $3400.
Likely a healthy retrace after a test of 4k
Then into an aggressive move to new ATH’s for merge pic.twitter.com/ZDvReVPAWP
— Cacti (@thecryptocactus) April 5, 2022
I think we will see an ETH push towards $4,000 soon as long as the price action remains above this support at $3,400. A healthy pullback is likely after a test of $4,000. Then in an aggressive move to new all-time highs from the merger.
ETH reserves in the market fall to their lowest level in three years
At the same time, the downward trend of ETH supply on crypto exchanges continues.
In particular, Ether net reserves across all exchanges have fallen to their lowest levels since August 2018, suggesting that traders have been withdrawing ETH en masse for long-term holding or staking in DeFi liquidity pools .
What’s more, the number of non-zero balance addresses continues to rise, suggesting a growing adoption and distribution of ETH.
Technical data points to an ETH price of $4,000
The chances of ETH price reaching $4,000 in April are also being boosted by a classic technical pattern.
Nicknamed “symmetrical triangle”, The pattern usually forms when the price consolidates sideways within a range defined by a descending upper trend line and a rising lower trend line, after a sharp move up or down.
In an ideal scenario, the triangle resolves after price breaks in the direction of its previous trend, so it is considered a “continuation pattern.”
However, breakouts of symmetrical triangles do not necessarily lead to a continuation trend. For example, in the book Technical Analysis of Stock Trendstechnical analysts Robert Edwards and John Magee point out that Around 25% of all symmetrical triangle breakouts lead to reversals, i.e. the price does not break out in the direction of its previous trend, thus defying anticipation.
Ether’s current breakout appears to be a reversal as it bounces higher instead of continuing its previous downward trendas shown in the graph below.
The potential breakout target of a symmetrical triangle is calculated after measuring the maximum length between the upper and lower trend lines of the pattern and then adding the result to its breakout point.
This places the upside target for the ETH/USD pair at almost $4,000.
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