Ethereum blockchain will receive the Pectra upgrade on May 7, which could have a bullish impact on its price. Let’s explore three key reasons why the post-Pectra update could propel Ethereum (ETH) price to $2,000 after weeks of struggle.
Three Key Reasons Ethereum Price Will Hit $2,000 After Pectra Upgrade
The Pectra advancement will modernize the Ethereum blockchain, bringing new features to the table. Reducing the layer-2 transaction costs, the update will implement 6 blobs per block. Validators will be able to consolidate 2,048 ETH, and EIP-7702 will bring smart contract functionality to wallets.
The huge update for Ethereum will result in a notable impact on the token’s underlying price. This could be the reason that ends the lackluster performance of Ethereum price. Here are the three reasons why this technological reform could catalyze a bull rally for ETH.
1. Technical Analysis Hints Bullish Breakout Likely
With a crypto market turnaround, Ethereum price has created an evening star pattern near the $1,755 demand zone. Following the trend reversal pattern, ETH began a new V-shaped reversal, creating consecutive green candles, signaling the resurgence of bullish momentum.
This bounce from the 50% Fibonacci level near $1,755 pushed ETH price to revisit the 61.80% Fibonacci level at $1,835. Due to this pivotal recovery, investors expect the possibility of a $1,855 breakout rally for Ethereum.
The MACD’s bullish crossover signals trend reversal, which is in line with the above outlook. Furthermore, the 4-hour RSI line has bounced off the oversold level, reflecting the buyer strength.
As a result, investors can expect the breakout rally to push Ethereum price to the next key hurdle at $1,949 or roughly $2,000. This level coincides with the 78.60% level.
Optimistically, with the new Pectra upgrade amid a broader market recovery, Ethereum could reach the previous swing high near $2,100. Hence, the Ethereum price prediction marks an upside potential of 25% upon breakout.
2. Ethereum On-Chain Data Signals Potential Rally Trend
IntoTheBlock’s Global In/Out of the Money Around Price (GIOM) metric shows the next key hurdle extends from $2,042 to $2,499. Here, roughly 13 million addresses that bought nearly 70 million ETH at an average price of $2,298 are “out of the money”. While the Pectra upgrade-driven Ethereum price jump could hit $2,000, investors should consider booking profits here due to selling pressure from the aforementioned underwater investors.
Alternatively, the nearly 7 million addresses that purchased 8 million ETH at $1,794 are a good support level that investors should keep an eye on.
3. Growing Confidence of Large Holders
Large Holders’ Netflow for Ethereum spiked by 78.07% from 37.12k to 105.33k between April 29 to May 6. Large Holder Netflow tracks smart money investors that hold 0.1% of ETH’s supply. An uptick in this cohort signals an optimistic outlook and hints at an upcoming price rally for Ethereum. Combined with the optimistic technicals and ITB’s data, the outlook for ETH remains largely hopeful.
Conclusion
The recent price surge aligns with the upcoming network upgrade which is a few hours away. The crypto market is anticipating a cheaper Layer-2 transaction and a smart contract facility for Ethereum wallets that could boost its price to key psychological levels or higher.
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