Ethereum’s native token, Ether ( ETH), could be worth $3,000 in March if it is supported by a combination of technical, fundamental, and on-chain catalysts.
The price of ETH paints a “symmetrical triangle”.
Ironically, the first interim bullish outlook on Ether comes from a bearish continuation.
Notably, ETH saw a 50% drop from its Dec. 2, 2021 all-time high at $4,650. This was followed by the formation of a consolidation channel known as a symmetrical triangular. Since the beginning of the year, Ethereum has fluctuated between a falling upper trendline or a rising lower trendline.
Daily price chart for ETH/USD featuring symmetrical triangle. Source: TradingView
ETH/USD retested support at the lower trendline of the triangle on March 14, near $2,500. This was after a sharp correction that saw sellers close to the 20-day exponential moving Average (20-day EMA) as shown in the chart.
Since then, ETH’s prices have rebounded as high as 9.26%. On March 16, ETH closed above the 20-day EMA resistance to reach nearly $2,750.
A decisive rebound and an increase in trading volumes could make Ether’s next upside target at $3,000.
The Merge
Tim Beiko , an Ethereum developer, announced on March 15th that they had successfully tested “Merge”, using the Kiln testnet. This raised speculations that the protocol will switch completely from proof-of work to proof-of stake in Q2/2022.
It seems to have worked! Validators are producing post-merge blocks, which contain transactions. https://t.co/xearnsuZFp
Just waiting on finalization now https://t.co/BEfJOI4qqj pic.twitter.com/c4p1UXB5vw
— Tim Beiko | timbeiko.eth (@TimBeiko)
March 15, 2022
Since December 2020, Ethereum’s first consensus layer upgrade in December 2020, the euphoria surrounding the Merge has been one of the key bullish prospects for its growth.
Arcane Research reported that 312,000 validators had staked 10,000,000 ETH on the Merge (also known Ethereum 2.0) smart contacts.
This amounts to almost $26 billion in Ether, which is more than 8 percent of the total circulating supply. Its price has risen by almost 360% since its December 2020 low of $525, due to the possibility of more Ether being out of circulation.
Lito Coen is the founder of Crypto Testers, a product comparison platform. expects Merge to see Ethereum’s daily emission rate drop from 12,000 ETH per Day to 1,280 ETH per Day. Noting that the network’s “yearly inflation will decrease from 4.3% to 0.0.43%”, which is equivalent to three Bitcoin halvings.
Ethereum supply growth. Source: Lito Coen
Coen stated that the 0.4% inflation figure does not include the EIP-1559 automated ETH burning ($5b burned since launch). ETH burn will deflationary if taken into account Ethereum.
Positive divergence in utility and price
An emerging bullish divergence in Ethereum’s daily active addresses and ETH’s market price is also apparent according data from analytics platform Santiment.
Notably, Ethereum’s DAA declined but not as much the prices which fell about 35% over the past four months. This indicated that users continue to interact with Ethereum for purposes other than speculation and trading.
Related: How professional Ethereum traders place bullish price bets while limiting their losses
Santiment, citing the chart below, stated that “ETH active addresses divergence still remains in the area prices historically rise.”
Ethereum DAA-price divergence. Source: Santiment
“This is a vote to confidence in Ethereum, and a statement that (and growing) it’s here to remain (and grow),” Michael Pearl, chief operating office of Kirobo decentralized application developer, said. He also stated that ETH’s growth in decentralized finance would increase its price beyond $3,000.
These views and opinions are the author’s and do not necessarily reflect those of Cointelegraph.com. You should do your research before making any investment or trading decision.
