Ethereum Analysis: ETH Crosses $3k but Faced Massive Rejections

Ethereum has been on an uptrend lately with little breaks. As a result, the apex altcoin gained momentum and attained its highest over the last two years. The return to $3k is one of the most anticipated. However, as it approached, the thrill slowly died.

One of the reasons was due to massive uncertainty in price actions after the asset crossed $2,900. Many speculated that the mark was a brick wall and to cross it, the coin may retrace to find good support structures. 

However, a previous analysis debunked this claim. An excerpt from the outlook stated that there were huge prospects for ETH as there was no strong resistance after $2,700. It stated that the asset will slowly climb till it flips $3,000. 

The 1-day chart depicts what the above stated. Following small price struggles at $2,800, the next stop was the anticipated barrier. It is safe to conclude that support and resistance continue to play a key role in price movements.

What Caused Ethereum Hike to $3k?

While this is open to speculation, there is one clear catalyst. A report stated that Decentralized Finance on Ethereum is gradually gaining momentum. The resurgence is due to the normal promises of high yields, facilitated by a new type of crypto asset; liquid staking token (LRT),

The report further stated that Ethereum-based LRTs like Ether.FI and Puffer saw billions of volume in the past month alone. It is also noteworthy that the latest projects are all looking to replace Lido’s staked ETH token as the token of choice for Defi traders.

With the ETH ecosystem seeing this major competition and resuscitation in some areas, the asset is bound to see more price increases. The charts also agree with this claim. A closer look at the accumulation and distribution chart shows the gradual climb in HODLers’ activity. This explains the previous price actions as well. 

What the Charts Say

It is worth saying that the chart does not bring glad tidings. The main indicator to focus on is the Relative Strength Index. It shows that the top altcoin has been overbought since February 12. It is worth noting that the metric is strongly pointing to an impending correction that could send ETH as low as $2,700. 

Nonetheless, the Moving Average Convergence Divergence is almost silent at this time. There is no strong signal from the metric as it continues its uptrend in sync with current price increases.