Ethher (ETH), the native cryptocurrency of Ethereum Network, experienced a considerable amount of price rebound this week.
ETH prices broke $1,800 (USD) resistance on Thursday, reaching USD 2,400, maintaining the past two weeks.
According to analyst Scott Mercer, ETH is aware of the “reversal of the textbook bull.” Buyers can ultimately intervene in a conviction.
After a long-term bearish trend and a brutal closure in April, below the 50-month mobile average, this type of recovery is exactly what the Bulls expected, he says.
Mercer explained that the increase suggests strong demand for low prices and a rejection of new falls. In his opinion, this behavior may represent an important turning point in market structure.
He emphasized that it was still the beginning of the month, but that a rebound from last week’s US$1,600 and a final recovery in the 50-month mobile average could pave the way for a sustained upward movement, especially when improving macroeconomic conditions.
ETH has been behind BTC for several months, but Mercer recalled that the bullish trend revival “when it’s almost time you pay attention, not starting with euphoria.”
Pectra and macroeconomic improvements will promote ETH
The rise in ETH occurred in the middle of a general rise in financial markets. A speech by Jerome Powell of the Federal Reserve, the US central bank, created bailouts among investors by not adopting a more restrictive position on interest rates, as feared by Donald Trump’s tariff measures. This prompted both cryptocurrency and action.
Furthermore, PIN has been activated, the latest update for Ethereumwhich may have also contributed to the enthusiasm of the market. The initiative aims to improve efficiency, scalability and network safety, including improving account management and optimizing layer 2 solutions.
This context was also facilitated by the announcement that a meeting will be held this weekend between US representatives and the Chinese government to discuss trade negotiations. This encounter comes with the expectation of a cast of tariff tensions.
ETH was deflation again
Analyst Ted Pillow stood out as a positive point in the market. This means that Co-Burning is bigger than issuancewhich promotes evaluation in a large context of demand due to increased network activity. However, for now, ether deflation levels are minimal or non-existent as supply has not decreased.
Pillow added that President Trump’s family company, World Liberty Financial, will increase market ownership and buy 3.5 million ETH, which will drive up rising prices.
According to the analysis, if the price is maintained above USD 2,200, Alto Seasonperiod when altcoins perform better than Bitcoin. Historically, this phenomenon occurs after a significant impulse in ETH demand for BTC.
Adjusted, the analyst known as Rekt Capital was ETH is over 2,200 USD, but will be placed at a higher price. As shown in the following graph, the history of 2024 highlights that this level of new support tests will end with bullish results.
Despite the positive signal, ETH is 52% below the US$4,900 historic record in 2021, 42% less than the US$4,000 maximum since the cycle began after the crypto-in wire in 2022.
Despite the rebound, ETH continues to show weakness
Despite the rebound, There will be a decline in price for Bitcoin Some analysts are skeptical about ETH. In it, investment firm Two Prime noted at the beginning of the month that it was “negotiated as a memo coin, not a predictable asset.”
In his opinion, Bitcoin was able to recover his average behavior, attracting purchases in Falls after the biggest historic reaction. This has led businesses to focus their investment policies solely on Bitcoin.
It also highlights that Solana, Ethereum’s competitive network, offers faster transaction speeds, reduced costs, and improved user experience, creating challenges for ETH adoption growth.
He adds that BTC purchases with cited funds (ETFs) have exceeded ETH purchases by almost 24 times the margin since their debut last year. Even if the market capitalization is high, the total amount of Bitcoin acquired with these funds is more than twice that of Ethereum.
This same week, in the middle of the ETH rise, as shown below, this asset registered capital ETF reflects the low appetite of investors accessing these devices.
Identify by a token dispatch analyst Three major barriers facing Ethereum ETFs. The first is the high cost of some products. For example, Grayscale Ethereum Trust (ETHE) charges an annual committee of 2.5%, far outweighing alternatives such as the BlackRock ETF (0.5%).
Secondly, the complicated story of Ethereum. Bitcoin was able to position itself as “digital gold,” but Ethereum serves multiple functions. An active ecosystem that generates performance through networks of smart contracts, Defi-based, NFT, and staking. This diversity makes it difficult to explain its value proposition in a simple way.
“If a financial advisor can’t explain an investment paper easily, adoption is affected… The simplicity of Bitcoin won that fight,” they said.
The third obstacle is the exclusion of staking in the current ETF. This feature allows you to get rewarded with blocking ETH on intelligent contracts, so that absence reduces the appeal of the product. “We have eliminated differentiated features by preventing the ETH ETF from adopting staking regulatory liability,” they conclude.
Anyway, the recent price impulse gives us enthusiasm, The market still has strong challenges to continuetherefore operators need to consider risks in the midst of growing positive expectations.
