Ethereum (ETH) price broke above a descending resistance line. It is possible that the momentum has accelerated due to the upcoming Ethereum Shanghai upgrade. Retesting the $1,650 area could accelerate the rate of increase further.
Ethereum news last week was decisively positive. The Ethereum supply has become deflationary once again. The current supply of 120 million ETH tokens is 2,000 less than when Ethereum 2.0 is released in September 2022, and has switched to a proof-of-stake (PoS) consensus mechanism.
Ethereum is likely on the rise due to the upcoming Shanghai upgrade, the next planned update to the blockchain. While the upgrade will not address gas fee issues or improve smart contracts, it will allow for a phased withdrawal of stacked ETH, which has been on the Beacon chain for more than two years.
Ethereum price finally breaks out
The price of Ethereum has grown at an accelerated rate since the beginning of the year. On January 11, it broke both the $1,350 resistance area and the descending resistance line that has been present since August 2022. So far, ETH price has reached a high of $1,611.
The main resistance area is at the $1,660 average price, formed by the 0.618 Fibonacci retracement resistance level and a horizontal resistance area. A move above this could take Ethereum towards $2,000. In case of a downside move, the $1,350 area will provide support.
Wave Count Predicts Ethereum Above $2,000
Like price action, wave calculations are bullish for Ethereum price. This suggests that ETH price is in the third wave (black) of a five-wave upward move.
The sub-wave count is given in red, indicating that ETH is correcting inside sub-wave four. The most likely level for the wave to end is at the 0.382 Fibonacci retracement support level (red) at $1,440. This is because wave four is often shallow. If true, the price could reach this zone within the next 24 hours.
Therefore, a drop below the 0.618 Fibonacci retracement support at $1,340 would make this count unlikely, while a drop below the wave at $1,244 would invalidate it altogether. In that case, ETH price would decline below $1,200.
The long-term wave count shows that ETH price is trading inside an ascending ABC corrective structure (white). The previously mentioned five wave upward movement creates this C wave.
A 1:1 ratio for Waves AC will propel ETH to a high of $2,241.
A move above the $1,650 resistance area and its recognition as support will go a long way in confirming that this is the correct count.
To conclude, the ETH price analysis most likely favors a move towards $2,240. A decline below $1,244 would invalidate this price projection and suggest that Ethereum price could decline below $1,000. The release of the Ethereum Shanghai upgrade could further add to the bullish momentum.
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