Alongside the high anticipation for Ethereum 2.0, the high time frame breakout and daily gas usage on Ethereum remain key positive factors.
Eth2 momentum accelerates in correlation with price
Data from CryptoQuant reveals that the value staked in the Eth2 deposit contract address is showing a correlation with the ETH price.
Ki Young Ju, CEO of CryptoQuant, noted that the correlation is seemingly growing as the launch date approaches. He wrote:
“As the ETH 2.0 launch date approaches, it seems to be a growing correlation between $ETH price.”
This trend has been anticipated by analysts because of the significance of Eth2. When activated, Eth2 is expected to improve the transaction capacity of the Ethereum blockchain network.
Since nearly $300 million worth of ETH would get deposited into the Eth2 deposit contract address, it could also decrease the selling pressure on ETH over the long term.
High time frame breakout
The price of ETH broke above $500 for the first time since May 2018, breaking out from a two-year range. It has already risen above $580 since, demonstrating strong momentum and with little resistance above $620.
If ETH surpasses $620, the next high time frame resistance levels are found at $784, $915 and $1,200.
Traders expect ETH to hit $620 in the short term and possibly consolidate under it until the next breakout occurs.
A pseudonymous trader known as “Rookie” said ETH could hit $620 in a matter of days, as it shows strong technical momentum.
Although both Bitcoin (BTC) and ETH prices pulled back during the weekend, analysts say that TWAP algorithms could cause the momentum to resurge once again. Qiao Wang, a quantitative trader and analyst, wrote:
“The reason why weekends exist is to shake out the weak hands before institutional buyers turn on their TWAP algos again on Monday.”
Fundamentals are backing the rally
According to on-chain data from Etherscan, the daily gas usage on Ethereum is hovering at an all-time high.
The term “gas” refers to transaction fees on the Ethereum blockchain network. When gas usage is high, on-chain user activity is rising.
The increase in daily gas usage likely comes from two sources: deposits to the Eth2 address and a growing number of decentralized finance users.