Ethereum Gains 5.3% Amid U.S. Market Movement
Ethereum (ETH), the native cryptocurrency of the Ethereum blockchain, experienced a notable 5.3% increase during Friday’s U.S. trading session, climbing to $2,977. This upward momentum aligns with a broader market sentiment driven by a stable global risk environment and growing confidence in the cryptocurrency market.
Impact of the Bank of Japan’s Interest Rate Adjustment
On December 19th, the Bank of Japan raised its interest rate to a 30-year high of 0.75%. This decision, aimed at combating inflation that has exceeded the 2% target, triggered rising government bond yields, including Japan’s 10-year note rising above 2%. This monetary policy adjustment spurred optimism in global markets, including digital assets.
Ethereum benefitted significantly, with its price climbing alongside an increase in trading volumes. Other cryptocurrencies reflected similar upward patterns during this time of market activity.
Ethereum’s Network Growth Drives Positive Sentiment
December brought more promising news for Ethereum, as on-chain data highlighted considerable growth in network activity. According to analytics platform Santiment, the blockchain saw an average of 163,000 daily new wallet creations, surpassing 124,000 in July. On two notable days in December—December 2nd and 15th—new wallet formations reached 197,380 and 195,460 respectively.
Such growth in new addresses signals increasing user engagement with Ethereum’s blockchain, underpinning long-term confidence in the platform and supporting its price stabilization above $2,700.
Technical Watch: What’s Next for Ethereum?
Despite recent gains, Ethereum shows signs of potential price correction. A technical analysis of ETH charts highlights a bearish head and shoulders pattern. This formation suggests ETH may face resistance and potentially drop by another 6%, testing key support levels near $2,000. On the flip side, if Ethereum sustains its position above $2,700, it could maintain buyer momentum and potentially revert to its upward trend.
The Relative Strength Index (RSI) stands at 45%, indicating a neutral to slightly bearish sentiment. This makes the $2,700 support level crucial for Ethereum’s next price movement.
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Conclusion
Ethereum’s recent stabilization above $2,700 reflects both market optimism and the platform’s growing user base. While shorter-term technical indicators suggest potential price fluctuations, Ethereum continues to show resilience backed by its robust network growth. As market conditions evolve, investors will keep a close eye on this key cryptocurrency.
