Key Takeaways
- Ethereum targets $265, but demand has yet to pick up behind the break out
- The low levels of volatility also affected the number of ETH-related mentions on social media
- Regardless, Ether’s network growth is trending up, which may lead to substantial gains
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Despite lackluster price action last week, Ether is flashing multiple buy signals as Ethereum network growth continues to surge.
Ether Prices Await Uptick in Demand
Ethereum was contained within a descending parallel channel through June. During the previous month, ETH rose to the upper boundary of this technical formation, but its price was rejected by the barrier and fell back towards the lower boundary. From that point, the smart contract giant bounced back up to resistance, consistent with the characteristics of a channel.
A spike in the buying pressure behind Ether allowed it to break out of the descending parallel channel last week. However, buy-pressure was weak and prices sputtered.
Now, ETH is trading just above the upper boundary of the channel. With sufficient consolidation, this may create a new overhead resistance level unless there’s an uptick in demand.
One strategy for analysis is to draw a parallel line equal to the height of the channel to use as a target when an asset breaks out of that channel. Based on this technical rule, Ethereum could advance as far as $265 if demand picks up.
On-Chain Metrics Turn Bullish
Even though Ethereum seems to be on the cusp of a bullish breakout, traders have shifted their focus towards lower-cap altcoins. Data reveals that the number of ETH-related mentions across different social media networks dropped significantly over the past few days.
The negative social sentiment is likely due to the lackluster price action, but the outcome may benefit the bulls, according to Brian Quinlivan, marketing and social media director at Santiment.
“With enough people ignoring ETH while keeping their eyes on smaller caps, there will be an opportunity to catch the crowd off guard to make whale investors maximize their gains when they finally make their moves,” said Quinlivan.
The rate at which the Ethereum network is growing adds credence to the bullish outlook. This fundamental metric is one of the most important gauges for understanding the health and well being of any crypto project.
Historical data suggests that this is a precise price predictor. Indeed, network growth has led to an increase in Ethereum’s price over the last four months, while declining network growth has been followed by price slumps.
Over the past three days, Ethereum’s network growth jumped by nearly 21%. The sudden upswing might be followed by a price increase if history repeats itself.
While the odds seem to favor the bulls, investors must pay close attention to the $236 support level. A daily candlestick close below this price hurdle may jeopardize the optimistic outlook. Under such circumstances, the next significant levels of support to watch out for sits between $231 and $224.