Despite many cryptocurrencies reaching new yearly highs, Ethereum (ETH) has shown weaker performance than expected in December. Even with ETF applications and negative inflation, ETH continues to struggle, trading near its yearly high while battling to surpass the $2,400 mark.
ETH’s underperformance is not expected to last indefinitely, as it has shown resilience in the past. Since May 2022, ETH has been attempting to continue its upward movement along an ascending support trend line, confirming it multiple times despite strong selling pressure.
In the past eleven weeks, ETH has formed eight bullish candles and is now fighting for a tenth. The price, which has been stagnant since the beginning of 2022, has reached a resistance level that is supported by a weekly RSI breakout, a signal that previously triggered a rapid upward price movement.
Analysts believe that after a prolonged period of weakness, ETH’s price increase could continue. Crypto Tony suggests that the $2,500 and $2,600 levels could be breached soon. Michael Poppe predicts that Ethereum will outperform Bitcoin in 2024. BrianH anticipates that the upcoming Cancun-Deneb update will increase interest in Ethereum.
The upcoming Cancun-Deneb hard fork and Proto-Danksharding update are expected to reduce the cost of publishing proofs on layer 1 for layer 2 solutions, potentially leading to lower transaction costs on layer 2 platforms.
If Ethereum’s price continues to close above the $2,370 resistance, it could reach new highs between $3,360 and $3,500, which is about 40% above the current price. However, closing below this resistance could trigger a return to the $2,120 support level. The market has yet to fully price in the applications for a Spot ETH ETF by trillion-dollar asset managers like BlackRock and Fidelity, which could pave the way to the $3,500 journey if volumes in the ETF channel remain strong.