Ethereum (ETH) price has climbed to a 22-month high of $3,496 on Wednesday, Feb. 28. Bitcoin’s rally to $64,000 and the upcoming Dencun upgrade activation on mainnet have the main catalysts behind Ether’s price gains.
Ethereum has enjoyed a close correlation with Bitcoin, at 0.92, according to data from TradingView.
ETH price vs. BTC price correlation. Source: TradingView
The other catalyst is altcoin’s upcoming Dencun upgrade. This is a key upgrade for Ethereum after the altcoin’s Merge – the transition from Proof-of-Work to Proof-of-Stake. Ethereum developers made an official announcement stating that the Dencun upgrade will go live on mainnet on March 13.
The Dencun upgrade is expected to implement several EIPs, including EIP-4844, which introduces proto-danksharding aimed at simplifying the transaction process by storing some data off the blockchain, speeding up transactions and cutting costs.
Blobs are coming .oO
Dencun is scheduled for mainnet activation at epoch 29696, occurring March 13 at 13:55 UTC. See the announcement below for client release versions and other useful info about the upgrade 🤖https://t.co/9Wa3Y5M5k4
— timbeiko.eth ☀️ (@TimBeiko) February 27, 2024
The Dencun upgrade has successfully gone through all the testing phases and is ready for mainnet activation. This event has likely fueled anticipation among ETH holders, as the altcoin’s price continues its uptrend.
Another factor driving ETH price is the deflationary nature of the token after the Beacon upgrade. At the moment, more than 26% of ETH in circulation has been staked and out of circulation.
Ethereum price analysis
Ether has increased 61% from Jan. 23 to set a new year-to-date high at $3,496 on Feb. 29.
The uptrend is likely to continue as backed by the up-facing moving averages and the seven green candles printed in the daily chart (see below).
In addition, the relative strength index (RSI) was also in the overbought region. The price strength at 86 shows that there are more buyers than sellers in the market and that there is still more room for the upside, before the index hits 100.
As such, ETH price may continue rising from the current levels with the main resistance being found at $3,500. Breaking above this level, the bulls will be bolstered to send the pierce higher toward the all-time high of $4,000. This would represent a 16% uptick from the current price.
ETH/USD daily chart. Source: TradingView
On the downside, the position of the RSI in the overbought region suggested that the token is currently massively overbought. The uptrend might get overheated over the next few days resulting in a correction.
The first line of defense could arise from the psychological levels at $3,200 and $3,000. Lower than that, more support lines could emerge from $2,800 and later the 50-day exponential moving average at $2,688.
