Ether (ETH), the native cryptocurrency of the Ethereum blockchain, surged to its highest level in over three months on Monday, driven by growing optimism surrounding the regulatory outlook under the incoming Trump administration and significant inflows into recently launched spot Ether exchange-traded funds (ETFs).
The cryptocurrency has benefited from the expectation that reduced regulatory hurdles could boost Ethereum’s role in decentralized finance (DeFi), a rapidly growing peer-to-peer financial ecosystem that leverages Ethereum’s blockchain and smart contracts for transaction execution.
Record Inflows into Ether ETFs
Ether’s rally comes amid a surge of institutional interest, with spot Ether ETFs recording over $215 million in net inflows within just three days after the election, according to data from crypto analytics firm CoinGlass. This marks the highest three-day influx since the launch of the ETFs in late July.
Ether has gained approximately 38% over the past week, recently trading around $3,320 and pushing its year-to-date increase to about 45%. Despite the rally, Ether’s performance has lagged behind that of Bitcoin (BTC), which has more than doubled in value this year.
Technical Analysis: Breakout and Key Price Levels
From a technical perspective, Ether’s price recently broke out of a six-month descending channel, marking a significant shift in market sentiment. The breakout, which occurred late last week, was accompanied by above-average trading volume and further accelerated over the weekend.
The Relative Strength Index (RSI) currently sits above the 70 threshold, indicating strong bullish momentum but also signaling potential overbought conditions, which could lead to short-term price corrections.
Resistance Levels to Watch
The first major resistance level for Ether is around $3,650. Investors who acquired Ether at lower levels may look to take profits in this area, as it aligns with a trendline connecting several countertrend upswings from late March, early April, and mid-June.
If Ether breaks decisively above the $3,650 level, it could trigger a rally toward $4,090, where the cryptocurrency is likely to encounter significant resistance near its March 2024 swing high.
Support Levels to Monitor
On the downside, key support for Ether is found at the $3,250 level, which aligns with a trendline connecting several trading levels from April to July. A drop below this area could signal a deeper pullback to around $2,950, just above the upper trendline of the descending channel. This level is also near the 200-day moving average, which could act as a strong support zone for investors looking to buy on a dip.
In the event of a more substantial retracement, Ether may find additional support around $2,720, a key level that has held multiple peaks from early January to late October. This area could attract buying interest and mark a potential low for the next leg of the bull market.
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