Can Ethereum Price Flip $2,500 Into Support And Ignite An Altcoin Rally?

Ethereum (ETH) price action is under observation since it has approached a significant resistance-turned-support level of around $2,500.

Market analysts have been keen to identify whether ETH price would hold onto this level to initiate a general market momentum.

Ethereum Price Retests $2,500 as Key Pivot

Ethereum price is trying to reverse the $2,500 resistance area to a new support level. The zone has been a resistance point for a larger part of the last quarter, turning away countless bullish advances.

The latest price trends indicated that Ethereum was dipping just above this mark following a recent breakout effort.

According to chart analysis by Ted Pillows, the next structured resistance is between $2,800 and $2,880. That area has stopped gains in the past and ended as a final top before a wider reversal.

The confirmed bounce at the level of $2,500 could restore the bullish momentum and kick off the test of that upper range.

Ethereum Network Activity Approaches Peak Usage

In the meantime, the number of Ethereum daily on-chain transactions has continued to increase and approach the historical all-time high value achieved in 2021.

According to blockchain data shared by Merjin Trader, current network usage is approaching 1.5 million transactions per day.

This growth has occurred without a corresponding surge in gas fees. In turn, this is an indication of long-term user demand within DeFi, NFT, and layer-2 ecosystem and not a form of speculative mania.

Also, there are no meme coin trading volume surges and event-driven volatility in this activity. Rather, the increase seems to be due to consistent decentralized application usage and the growing number of developers and protocols to utilize the Ethereum network.

Such a trend could reflect underlying resilience in Ethereum adoption as opposed to short-term trader investment.

Altcoin Structure Shifts After Bitcoin Dominance Peak

More so, analyst CryptoELITES noted that Bitcoin dominance has now been inverted following having reached a local peak at approximately 58%, an area that previously experienced cycle tops in 2019.

After such tops, there is usually a tendency in the crypto market to move to the altcoins, which brings more capital to Ethereum and other non-Bitcoin cryptocurrencies.

Subsequently, the pullback in dominance mirrored patterns that preceded previous altcoin rallies. Ethereum, as the leading altcoin by market capitalization and network usage, often leads such rotations.

If the decline in dominance persists, Ethereum’s relative strength may increase as investor focus shifts away from Bitcoin-led momentum.

Altseason Builds if Ethereum Price Holds Key Levels

The Ethereum network is seeing a surge in activity. There is strong support around the $2,500 level while Bitcoin dominance is declining. This combination of factors has often preceded gains in altcoins in the past.

If Ethereum price holds above the $2,500 mark and regains bullish structure above the $2,800 mark, it could lead to an altcoin rally.

In case these conditions do match, the larger market may possibly be in a state of precedent altseasons, meaning that Bitcoin capital flows into Ethereum and mid-cap tokens.

In these times, Ethereum price tends to grow, and its dominance in the altcoin market grows as well.

Further supporting a bullish breakout, a recent analysis pointed to Ethereum rising in institutional accumulation. This included an $80 Million withdrawal on Matrixport and a $517 Million acquisition by SharpLink Gaming.

On-chain data from cryptoQuant also indicated that there was a June record-breaking accumulation and staking.

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