Ethereum Price Forecast: Will ETH Keep Pumping To $4,000 Or Pullback?

Ethereum price forecast: Ether has in the last 20 days surged by almost 40% from $2,416 to $3,344, outperforming Bitcoin’s 35% increase over the same period to $59,354 on Wednesday, February 28.

Although market participants anticipated a rally ahead of the Bitcoin halving due in April, it seems to have come early. Unlike other bull markets, cryptos are trading in the era of ETFs.

Other than the retracement in January caused by a sell-the-news action, the outlook of the market has been bullish, especially for Ethereum. Following the approval of Bitcoin ETFs, optimism for ETH ETFs has been growing.

Ethereum Price Forecast: Why Is ETH Rally Unstoppable?

Ethereum price action this week can be attributed to various factors including the Dencun upgrade — expected to launch on March 13 on the mainnnet, the spot ETF, and a strong bullish case exhibited by Bitcoin.

The Dencun upgrade will be a game changer for the Ethereum ecosystem starting with a larger block size from 12.5 MB to 25 MB, cheaper transactions for layer protocols, and a better developer experience.

For this reason and more, the upgrade could be a market mover which may explain the increasing risk appetite among investors. Following last Monday’s swing above $3,000, confidence saw many people buy ETH, in turn, building the momentum likely to push Ethereum price to $3,600 this week.

ETH’s technical structure remains steady based on the position of the Relative Strength Index (RSI) at 78. Its persistent climb implies that buyers are in control and the uptrend is far from over.

The Money Flow Index (MFI), an indicator that tracks the volume of money flowing in and out of Ethereum is in sync with the rising price. Unless people decide to sell for profit, Ethereum is poised to keep pumping ahead of the Dencun upgrade.

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According to IntoThe Block’s blockchain analytics, ETH faces little resistance up to $3,800 from its current level. The second-ranked crypto asset has strong support, with the largest accumulation zone ranging from $2,803 to $2,903. Around 1.6 million holders bought about 4 million ETH at an average cost of $2,860.

So far more than 85% of the total Ethereum supply, approximately $27 billion is in profit or in the money. The amount of supply in loss stands at 14.4% worth around $4.8 billion. 3,400 ETH worth roughly $11.3 million, making up 0.03% of the supply, is locked in staking contracts.

From the above data, it can be established that the majority of ETH holders are in profit. Their adamance to sell speaks volumes about the long-term bullish outlook.

Ethereum’s decentralized finance (DeFi) sector has also been growing in tandem with the price surge that Defi Llama shows a total value locked of $52.4 billion. As this value increases, selling pressure will reduce, allowing Ethereum price to keep rallying.

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