Ethereum (ETH) enthusiasts have found a glimmer of hope in the recent bullish reversal as the entire crypto market appears to be headed for recovery. The second-largest cryptocurrency by market capitalization experienced a significant upturn, clawing its way back from the $1,550 support level just last week.
At the time of writing, ETH is trading at $1,655 according to CoinGecko, showcasing a commendable 5% uptick. This surge has bolstered investor confidence, prompting them to set their sights on challenging the overhead resistance trendline.
Battling The Resistance: A Critical Juncture
The current phase in Ethereum’s price dynamics is marked by a descending resistance trendline. Over the past two months, the cryptocurrency has encountered this formidable resistance barrier twice, both instances leading to a sharp downturn in price. This pattern underscores the resurgence of selling pressure whenever the price nears this elusive boundary.
Analysts are closely monitoring the situation, suggesting that should ETH breach the September 18 low of $1,610, it could open the floodgates for bears to push the asset below the $1,550 floor. Such a scenario could set the trajectory towards the $1,460 mark, representing a potential decline of 9.5%. The battle with overhead resistance remains a pivotal juncture for Ethereum, with both bulls and bears on edge.
ETH market cap currently at $195 billion. Chart: TradingView.com
Ethereum: Blockspace Profitability
Concurrently, Ethereum’s blockchain ecosystem is encountering a series of exceptional challenges. Insights from Blockworks data have illuminated a noteworthy aspect of Ethereum’s blockchain activity: it has consistently yielded profits since the network’s transition to a proof-of-stake consensus mechanism in September 2022. This transition was heralded as a pivotal moment in Ethereum’s evolution, aiming to enhance its scalability, security, and sustainability.
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Activity on the Ethereum network has dwindled, leading to September shaping up as the first month to post significant losses since the proof-of-stake upgrade. Throughout the month, Ethereum’s blockspace has recorded only one day of profitability, with losses accumulating to a staggering $15.9 million as of Monday.
Source: Blockworks Analytics
Meanwhile, this transformation in blockspace profitability aligns with an expansion in Ethereum’s circulating supply, which has increased by approximately 8,900 ETH this month, as reported by ultrasound.money.
Source: Ultrasound.money
Ethereum’s price battle at the resistance trendline may determine its short-term fate, while the concerning decline in blockspace profitability highlights broader challenges for the network.
ETH investors and enthusiasts are keenly observing these developments, hoping for a resurgence in both price and blockchain activity to regain their confidence in the platform’s future.
(This site’s content should not be construed as investment advice. Investing involves risk. When you invest, your capital is subject to risk).
Featured image from E-Mountainbike Magazine
