The price of Ether broke above the $ 547 level. Following the breakout, traders are signaling several key short-term resistance levels. Traders generally envision $ 600 as the main resistance zone for Ether, as this level marked the start of a downtrend in May 2018. As such, $ 600 could act as an area of interest for sellers. But, traders also believe that if Ether breaks above $ 600, it would likely enter the $ 700 to $ 900 range. Above that level, there is little resistance to the all-time high.
First, the Ethereum 2.0 update of the network is progressing, as a large amount of Ether continues to flow in the direction of the deposit contract.
Ethereum 2.0 is an update that will move Ethereum from the Proof of Work (PoW) consensus algorithm to the Proof of Stake (PoS) algorithm. Essentially, it removes miners from the network to optimize transaction settlement.
Second, on-chain data shows that whales continue to accumulate Ether. This trend coincides with a drop in exchanges' Ether reserves, particularly as more holders deposit the digital asset in the Eth2 deposit contract. Santiment researchers wrote when Ether broke over $ 500:
“Following in the footsteps of $ BTC, $ ETH has reached a 29-month high of $ 509. June 21, 2018 was the last time the price was this high for asset # 2 by market cap. The rise of the top 10 #Ethereum holders, combined with the supply of the coin on exchanges, has fueled this rally. "
The strong fundamental catalysts of Ethereum and the favorable technical structure for Ether make traders optimistic about the trend of the price of Ether in the short term. Michael van de Poppe, a full-time trader on the Amsterdam Stock Exchange, said that a pullback is likely to occur at $ 600. But above that level, the trader said the path to $ 900 or $ 1,000 it is clear.
Ether experiencing renewed momentum in 2021 would go hand in hand with the trend that BTC saw in the post-halving cycle of 2017. Although there is little historical data to suggest that Ether and altcoins will follow the same trend as three years ago, the narrative of a rally for altcoins in January 2021 remains strong.
For Ether to see a prolonged uptrend, it would first need to regain the resistance level of $ 600, as many analysts see this level as the main near-term threat.