Ethereum’s Rising Network Activity Points to Rally Potential After Breaking Falling Wedge Pattern

Ethereum network fees surged by almost 60% over the past week as investors returned from the holiday season. Concurrently, the stablecoin market capitalization on Ethereum hit an 18-month peak, signaling positive momentum for ETH’s recovery. If Ethereum can maintain its upward trajectory above a falling wedge pattern, there is potential for a rally towards the $3,366 mark.

The Ethereum ETFs experienced a second consecutive day of outflows, with a notable $20.1 million net outflow recorded, primarily driven by Grayscale’s ETHE. However, as investors gradually re-engage post-holidays, the outlook for ETH may shift positively. Notably, Ethereum’s network activity surged in the past week, with total fees spiking by nearly 60%, indicating increased activity within the Ethereum ecosystem, which could bode well for its price.

Moreover, Ethereum’s stablecoin market capitalization reached $83.31 billion, marking an 18-month high. Historically, sustained growth in Ethereum’s stablecoin market cap has been associated with price surges, as seen when ETH hit a yearly high of $4,093 in March.

The ongoing growth in Ethereum’s stablecoin market capitalization could potentially fuel further positive developments. A rising stablecoin market cap within a blockchain network reflects heightened economic activities on the platform, suggesting increased utility and demand.

From a technical analysis perspective, Ethereum is currently trading around $3,420, with a 3.2% increase on the day. The cryptocurrency is striving to break above a falling wedge pattern, with indicators pointing towards a potential rally towards $3,366. However, key resistance levels such as the 100-day and 200-day Simple Moving Averages, as well as the $2,817 resistance, could impede a sustained upward movement.

The Relative Strength Index (RSI) is on the rise, approaching the overbought region, while the Stochastic Oscillator (Stoch) has already entered the overbought territory, hinting at a probable short-term price correction. Additionally, over $45.7 million worth of futures positions are at risk of liquidation if ETH dips to $2,335.

In summary, Ethereum’s recent network activity surge, stablecoin market capitalization growth, and technical analysis point towards potential positive price movements for ETH in the near term. Investors are closely monitoring these developments as Ethereum continues to navigate market fluctuations and regulatory dynamics.