Among all the assets from the top 10, Ethereum feels the most confident and continues the recovery period before updating the historical record. Unlike the situation with Bitcoin, Ethereum has many fundamental factors that suggest the beginning of a powerful upward movement to levels above $6k.
The main factor of the impending bullish rally of the coin is a significant increase in on-chain indicators. Over the past two weeks, there has been a steady increase in the number of unique addresses with local drawdowns. Transaction volumes also remain at a fairly high level and do not fall during small periods of price reduction. The activation of the altcoin audience has always contributed to the early start of the bull market, and given the confident position of the cryptocurrency, there is no reason to believe that the situation will change in December.
Technical factors significantly contributed to the growth of on-chain activity. Two weeks ago, many crypto analysts called Ethereum "the altcoin for the rich," since the average commission on the coin network reached $64.
However, over the past week, this indicator has tripled and continues to decline. This is indirect evidence of the functioning of individual London upgrade protocols and contributes to the growth of the number of unique addresses. Positive dynamics is also visible on the on-chain address balance metric, which confirms the thesis of reducing the exchange balances of ETH coins to a three-year minimum.
Also, note that the growth of on-chain activity and the stability of the cryptocurrency was helped by the local update of Arrow Glacier, which delayed the activation of the complexity bomb (the mechanism freezes the network and reduces the reward of miners).
We have considered the key and fundamental factors of a possible bullish rally in the price of Ether. Now we turn to the immediate situation on the market. The main reason for optimism about the main altcoin is the fall of Bitcoin dominance to 40. At the same time, the dominance of ETH has increased to 20.8% over the past three weeks.
The combination of these factors allows Ethereum to show growth and not depend on the situation with Bitcoin. And even though BTC is starting to win back positions, Ether has enough time to resume growth and, at least, reach the previous peak in value.
The daily pattern of ETH indicates a local consolidation period with little unrest due to the expiration period and the mental anguish of Bitcoin. However, buyers can be calm for the bullish crypto market, while ETH/USD confidently holds the support area at $4k. If this position is maintained, the coin will continue to fluctuate between the support zone and the absolute maximum line, followed by its bullish breakthrough and movement to the $6k-$6.2k area.
At the same time, there is a possibility of a repeated retest of $3.6k, although it is hard to believe in the current market situation. The daily red candle has already formed a small lower wick, which indicates the strength of buyers. With this in mind, a decline below $4k looks unlikely so far.
Despite the positive situation around the main altcoin, technical indicators signal a weakening and lack of upward momentum. The MACD is moving in the red zone, and the stochastic has formed a bearish intersection and is declining in the bullish zone.
This is a healthy situation with price stabilization and, taking into account the increase in volatility over the weekend, this trend may last until the end of this week. However, if a positive announcement is fired on the weekend, then the timing of the start of the bull rally of the coin will shift. As of 14:00 UTC, the altcoin will presumably continue to fluctuate around $4k-$4.5k on the upcoming weekend, and next week it may get close to ATH and update it.
The material has been provided by InstaForex Company - www.instaforex.com