Will Ethereum Upward Momentum Drive It to $3000?

• Ethereum has climbed 4% from a low of $2,566 to a high of $2,695.
• Ethereum’s fees hit a five-year low due to rising memecoins and the Dencun upgrade.

In the last 24 hours, the Ethereum (ETH) price has climbed over 4%, rising from a low of $2,566 to a high of $2,695, which has sparked optimism among investors. After a week of consolidation, the second-largest cryptocurrency finally broke through the $2,500 resistance zone. 

At the time of writing, Ethereum is trading at $2,644, with a market capitalization of $320 billion. Additionally, the daily trading volume has seen an 18% increase, reaching $12.22 billion, indicating renewed interest in the market.

Ethereum shows signs of entering a bullish trend with the ongoing conversation around the network, which has seen a sharp decline in transaction fees. Experts believe the recent sharp drop in Ethereum network transaction fees to a new record low could be a bullish sign for Ethereum’s price. Fees have fallen to 0.6 Gwei (about three cents), down over 95% since March.

This significant decrease, the lowest in five years, is partly due to the growing popularity of memecoins on blockchains like Solana and the long-awaited Dencun upgrade, which has improved network efficiency and reduced gas fees.

However, the drop in transaction fees to 0.6 Gwei raises questions about its impact on Ethereum’s supply. Lower fees mean less ETH is being burned, which could eventually lead to an increase in the circulating supply. While this is favorable for users, it presents a shading challenge for Ethereum as an asset.

Ethereum’s Price Action and Technical Indicators

According to the daily price chart, Ethereum remains above the $2,600 support level but has fluctuated within a range of $2,500 to $2,800 over the past week. Although there’s optimism for a rally, the risks of a downturn persist, potentially pushing the price down to $2,300 before any significant recovery.

In a bullish outlook, traders are likely to keep their long positions open as long as the Moving Average Convergence Divergence (MACD) indicator continues to signal a buy. If the MACD moves closer to the neutral zone, these traders may increase their exposure to Ethereum, anticipating a potential bullish reversal if the indicator enters positive territory.

Adding to this cautious optimism is the fact that Ethereum’s price is currently above the 21-day Simple Moving Average (SMA) on the hourly chart for the ETH/USDT trading pair. A strong rebound that pushes the price above the $2,800 and $3,000 levels could potentially trigger a larger rally, with the possibility of ETH aiming for the $4,000 mark and even challenging its all-time high (ATH).

The broader crypto market, particularly the top 10 cryptocurrencies, has also performed well since the start of the week.