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Ethereum has been flashing some signs of tempered weakness throughout the past several days and weeks, hovering just above the lower boundary of its long-held consolidation channel.
The cryptocurrency’s present weakness is primarily rooted in that of Bitcoin, which has seen faltering momentum as it continues struggling to break above the key psychological resistance existing at the five-figure price region.
It does appear that this weakness could cause it to face a harsh rejection that causes it to spiral lower, but until it firmly breaks beneath the lower boundary of its trading range at $9,000, this possibility remains speculative.
That being said, if buyers are able to give the market a much-needed boost, it is a strong possibility that Ethereum and other altcoins could see some major momentum.
One analyst recently explained that ETH will be “unstoppable” once it is able to firmly surmount one critical resistance region.
He does believe that this level will be broken above at some point this year due to several fundamental factors.
Ethereum Flashes Signs of Near-Term Weakness, But Macro Outlook Remains Strong
At the time of writing, Ethereum is trading down just under 1% at its current price of $231.
The cryptocurrency has been hovering within the $230 region for the past few days, but a slight increase in selling pressure appears to have put it at risk of breaking below this level.
A firm decline beneath this price would be dire, as it happens to mark the lower boundary of its multi-month trading range between $230 and $250.
If its buyers continue guarding this key support, they could provide Ethereum with a boost that sends it back up to the upper boundary of its trading range.
In order for it to enter a firm macro bull market, however, it will need to do more than simply shatter the top of its range at $250.
One analyst recently explained that the critical level to watch for sits between $350 and $400. He believes a break above this will make the crypto “unstoppable.”
“Above Gray box ETH becomes unstoppable… And I believe this year it will be assaulted with great ferocity and overcome as 2.0, DeFi, and staking take this to new heights,” he explained.
Image courtesy of Pentoshi. Chart via TradingView
Fundamental Strength Could Help Propel It Past This Key Level
In order for Ethereum to surmount this crucial price region, it will likely require a combination of technical and fundamental strength.
It does appear to be strong on the fundamental front, as its on-chain demand has skyrocketed in recent times.
Another respected analyst recently spoke about why he believes ETH has yet to see peak on-chain demand, pointing to the rise of DeFi as well as the heightened scalability that ETH 2.0 will offer.
He concludes that the transition to 2.0 coupled with continued growth in the DeFi sector will lead to heightened capital inflows.
“Likely the combination of both ETH 2.0 and Defi’s continued growth will lead to a higher capital flow in a 3 month period over the next 2 years compared to 2017.”
Featured image from Shutterstock. Charts from TradingView.
