Ethereum’s native token Ether (ETH) is forecast to rally towards $3,000 in Q2 2023, after closing the previous quarter with a 55% gain.
The price of ETH is approaching a possible breakout
Ether’s price has more than doubled after bottoming out in June 2022 at around $880, weathering a series of negative events including the FTX crash, interest rate hikes and regulatory tightening US.
In doing so, ETH/USD has painted an ascending triangle, confirmed by its rising trendline support and horizontal level resistance. The pattern suggests aggressive buying, as the lows are getting higher while the highs remain around the same level, indicating more selling pressure at the given level.
As of April 2, ETH price is testing its horizontal level resistance range ($1,700-1,820) for a potential move higher.
A breakout will be confirmed if the price closes above the resistance range accompanying higher volumes. Also, the ascending triangle breakout target is measured with a length equal to the height of the triangle.
In other words, ETH’s bullish price target is in the range of $3,350-$3,900, depending on where traders see the triangle’s rising trend line support, as shown by Q1 and Q2 on the chart above. . This would suggest gains of 80% by June 2023.
Conversely, a pullback from the $1,700-1,820 range could delay the bullish setup and trigger a broader price correction.
Ethereum Whale Accumulation Stays Strong
From an on-chain perspective, Ether’s short- and long-term trends appear to be leaning towards the bullish.
Most of the Ethereum whale cohorts have increased their accumulation of ETH in recent weeks, according to the latest data from Santiment. For example, the supply of Ether held by addresses with a balance between 1,000 and 10,000 ETH (in blue in the chart below) has grown by 0.5% in March.
Similarly, the balance cohorts from 1 million to 10 million ETH (brown) and from 10 million to 100 million ETH have registered increases of 0.4% and 0.5%, respectively.
The growth came amid what appears to be absorbing selling pressure introduced by the 100,000-1M ETH (pink) and 10,000-100,000 ETH (orange) address cohorts.
At the same time, the growth could be attributed to the network’s proof-of-stake contracts, directly or through the use of third-party staking solution providers such as Lido DAO (LDO).
Total net Ether deposited to the official Ethereum 2.0 address surpassed 18 million ETH after rising around 3.5% in March.
The deposits have come ahead of the Ethereum, Shanghai and Capella updates (April 12), which would allow users to withdraw ETH from the PoS smart contract. Currently, this is not possible.
MVRV Z-Score: Reversal from lows for Ethreum prices
More bullish arguments stem from Ethereum’s MVRV Z-Score entering a stage that has previously preceded long-term ETH price rallies.
The MVRV Z-Score assesses when Ethereum is overvalued and undervalued relative to its “fair price”. As a general rule, the MVRV-Z Score indicates a market high (red zone) when the market value rises above the realized value, while the opposite indicates market lows (green zone).
Previous Ether price rallies coincide with its MVRV Z-Score rebounding from the green zone, suggesting the same could happen in the next three months.
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