Ethereum (ETH) Hits $3,600 Mark as Market Dominance and Betas Climb

Key Takeaways

• Ethereum’s (ETH) price reached a 260-day resistance
• Ethereum betas such as STRK and ARB started a resurgence
• Can Ethereum maintain its increase to a new yearly high?

The Ethereum price has performed admirably in November, increasing by over 50%. Its performance has spread toward its ecosystem, with several projects associated with it also appreciating. This was most clearly visible in the ENS price, the biggest gainer in the past 24 hours.

The increase took the ETH price to a 260-day descending resistance trend line. Since the Ethereum price trades 25% below its all-time high, a breakout could push ETH above it. Let’s analyze the price action and see how likely this is.

Ethereum Dominance and Betas

A basket of the five biggest Ethereum betas has underperformed most of the year, mirroring the ETH price. ETH betas were nearly 80% down from their March highs in August.

However, the trend has reversed since. After creating a higher low in November, ETH Betas accelerated their upward movement and increased by nearly 80%.

While their price is still considerably down since the March highs, the nearly 80% increase in November bodes well for the future trend. ETH betas reached their highest price since June today, Nov. 28.

Starknet (STRK) and Arbitrum (ARB) are the biggest gainers in the past week, posting increases of 36 and 32%, respectively. The Ethereum dominance chart shows a similar recovery this week, pointing to a resurgence of the Ethereum ecosystem. Additionally, the ETH price moved above $3,600 for the first time since July.

What About the ETH Price?

The Ethereum price has also increased rapidly in November. The $3,684 high is the highest price since July and marks a 55% increase since the start of the month. The increase took the ETH price to a 260-day descending resistance trend line that has existed since the yearly high in March. This is the third attempt at breaking out from the trend line.

Even though ETH has not moved above this diagonal resistance, it cleared two important 0.618 Fibonacci retracement resistance levels that coincide. These are the 0.618 Fibonacci resistance of the most recent drop (white) and that since the all-time high (black).

While ETH still needs to break out from its descending resistance trend line to confirm the positive trend, all signs point to a bullish trend reversal.

Technical indicators support the upward movement. The Relative Strength Index (RSI) broke its trend line and is above 50 (black circle). RSI breakouts often precede price breakouts. To support this bullish assessment, the Moving Average Convergence/Divergence (MACD) has made a bullish cross (black circle) and is increasing. The previous time this signal occurred (yellow) led to a 144% price increase.

Positive Ethereum news relates to its Exchange-Traded Funds (ETF). ETH ETF inflows have been positive  for the past four days, outpacing Bitcoin ETFs, which had negative inflows  in two of the past four days.

Retracements Before Breakout

While the long-term outlook is positive, the daily one suggests the ETH price will retrace first before eventually breaking out. This is because of the wave count and indicator readings.

The wave count suggests that ETH is nearing the top of wave three in a five-wave upward movement (white) that started in September. The sub-wave count is in black. A bearish divergence is developing in the daily RSI between the highs of sub-waves three and five (black). This often develops near the top of upward movements.

If ETH has started wave four, it will likely decline toward the 0.382-0.5 Fibonacci retracement support levels at $3,012-$3,175. Then, wave five will likely take the Ethereum price to a new yearly and possibly all-time high.

Ethereum Price Gains Momentum

The ETH price is undergoing a resurgence that has spread to its ecosystem. ENS, STRK, and ARB are the three biggest beneficiaries of this rally.

Once Ethereum breaks out from its diagonal resistance area, it could quickly increase to a new all-time high price.

About the Author

Valdrin Tahiri

Valdrin discovered cryptocurrencies while getting his MSc in Financial Markets from the Barcelona School of Economics in 2017. He has been an avid investor and trader since. Valdrin has written for several cryptocurrency media companies such as BeInCrypto and CoinGape.

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