Is Ethereum Surge Over?

Ethereum had a massive breakout on Tuesday. It surged after retracing to a low of $2,510. It shot up after rebounding, breaking the $2,700 resistance. 

The altcoin’s performance is not surprising, as a previous analysis hinted at it. It stated that the second-largest coin was experiencing notable buying pressure, which would be sufficient to break the highlighted level. 

Several factors contributed to the almost 4% increase ETH saw. Data from SoSoValue shows that it saw a significant inflow into ETFs. The spike comes after several days of a similar buildup. It also experienced a notable increase in trading volume during the previous intraday session.

A search through X shows that traders are increasingly bullish about the coin. Most expressed their pleasure over the massive increases the asset had. Some praised the Pectra Upgrade as a contributing factor to the improvement, reiterating the same sentiment as the developers. 

Data from DeFiLlama indicates that the asset experienced an increase in its Total Value Locked (TVL). The metric grew from $100 billion to $101 billion. The increase in total value locked coincides with improvement across other areas. Ethereum experienced significant inflows into its ecosystem over the past 24 hours. Its decentralized exchange trading volume surged from $1.67 billion on May 26 to $2.39 billion the next day. 

Chain revenue saw a similar increase as more users interacted with the blockchain. The massive inflow spiked demand for ETH, causing the surge. 

Price action at the time of writing suggests that the asset is seeing a trend reversal. It retraced to a low of $2,700. Nonetheless, traders remain bullish and call for further uptrends. 

The altcoin has yet to break above $3,000, but its bulls are calling for a new all-time high at $10,000. Most present the asset trending between a wedge as the reason for this conclusion. 

Ethereum Loses Steam

The current suggests that ETH is unable to continue the surge. Data from Santiment shows that investors distributed their profit into Ethereum and two other assets after selling their BTC. The number of new wallets was the reason for this conclusion. 

BTC is largely stable at the time of writing as it sees less selling volume. This may result in less inflow into Ethereum and other assets, leading to a further decline.

The analysis stated earlier predicted that the apex altcoin will see further declines after flipping the $2,700 mark. The unfolding price movement proved this right. Nonetheless, the article stated that a surge above the highlighted level would cause ETH to become overbought. An overbought asset is due for corrections, and the second-largest cryptocurrency may see further decline. 

The average directional index suggests that this may be the case. It has been on the decline since the second week of May. However, it halted its trend on Sunday but showed a slight upward movement, indicating that the push for new highs is weak.

The moving average convergence divergence responded to Tuesday’s surge with a slight change in trajectory. The 12-day EMA edged close to the 26-day EMA as a bullish convergence was underway. It resumed the downtrend on Wednesday as selling pressure increased.

Nonetheless, the pivot point standard indicates an impending decline below $2,600 as the apex altcoin struggles to sustain momentum above it.

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