Key Points:
Trading volumes #Ethereum surged to $75 billion, reaching a 2025 peak of $4788.
ETH has several favorable factors that continue to support an optimistic outlook.
If the trend line and horizontal support levels hold, a move towards $5000 can be expected soon after.
$ETH closed down in 5 out of the last 6 trading sessions ahead of two key economic events this week - the release of the Fed's minutes and Chairman Jerome Powell's speech on Friday.
Currently, the leading altcoin is approaching a key support area at $4100, which has served as strong resistance for about a year and a half, and depending on what happens next, this could be a pivotal moment for the ETH rally.
Trading volumes have remained quite high lately and currently account for nearly 10% of the token's circulating supply, which is $45 billion.
According to CoinMarketCap, on August 14, we saw $75 billion worth of ETH change hands, with the price touching and retreating from its current yearly high of $4788.
It seems the market has taken a much-needed breather after the impressive rally that lifted ETH from $1400 to current values.
Strong tailwind supports the bounce from $4100
The daily chart illustrates the relevance of the current level from a technical perspective. The price touches former resistance above, as well as the trend support line.
A bearish breakout below this area may signal the end of this latest uptrend and the beginning of a much deeper correction.
The Relative Strength Index (RSI) has just exited the overbought zone. This increases the likelihood of a much stronger pullback than most investors expect. However, in the current market conditions, it is difficult to imagine a future in which $ETH does not reach at least $5000.
We have a combination of favorable factors working in favor of ETH that were not present in previous scenarios. Here is a brief overview of some of them:
The passage of the Genius Act: this important legislative act paves the way for the launch of new decentralized applications in the USA based on stablecoins. These decentralized applications are likely to use the Ethereum network as their foundation.
Favorable regulatory environment: the new guidance from the Securities and Exchange Commission (SEC) advocates for the launch of new investment and trading products that could enhance the token's liquidity and its institutional adoption.
Inflow of funds into ETFs is growing: hundreds of millions of dollars are flowing into spot ETFs tied to ETH. Data from Farside Investors shows that the total assets under management (AUM) of these products have already exceeded the $12 billion mark.
Pectra Update: The Pectra Update has significantly improved the operational structure of EVM, making it more scalable and efficient. It also made the ETH supply deflationary by burning a large portion of the gas fees on the network.
We could expect a short-term bounce #eth from this level, as trading volumes seem to have already increased sharply as the price reached this point.
However, resistance and support zones at later time frames tend to be much more relevant in the short term. Therefore, a long position at this stage has little chance of a positive outcome, as the daily chart indicates a deeper rise towards the $4000 area. From which to bounce and enter.
Personally, I am looking for the $4100 level and will enter.
Spot - $4100
Futures - $4070 (if not drop, I will catch at $4300)
$ETH #Binance #altcoins #Analsis