Parabolic rally ‘a real possibility’ after Ethereum price surges to $547

The price of Ether (ETH), the native cryptocurrency of Ethereum, has surpassed $547. Following the breakout, traders are pinpointing several key resistance levels in the near term.

In the short term, traders generally foresee $600 as the major resistance area for Ether as it marked the beginning of a bearish trend starting in May 2018. As such, $600 could act as an area of interest for sellers.

But, traders also believe that if Ether surpasses $600, it would likely enter the $700 to $900 range. Above it, there is little resistance until the all-time high.

The weekly price chart of Ether. Source: TradingView.com

Ethereum’s outlook remains positive

The Ethereum network has seen numerous catalysts come into play in recent months.

First, the Ethereum 2.0 network upgrade is progressing, as a large number of Ether continues to flow into the deposit contract address.

Ethereum 2.0 is a significant upgrade to move Ethereum from the proof-of-work (PoW) consensus algorithm to the proof-of-stake (PoS) algorithm. Essentially, it removes miners from the network to optimize the settlement of transactions.

Second, on-chain data show that whales are continuing to accumulate Ether. This trend coincides with a drop in Ether exchange reserves, particularly as more holders deposit the digital asset to the Eth2 deposit contract. Researchers at Santiment wrote when Ether initially broke out of $500:

“Following in $BTC’s footsteps, $ETH has hit a 29-month high of $509. June 21, 2018 was the last time the price was this high for the #2 market cap asset. #Ethereum’s top 10 holders rising, combined with coin supply on exchanges, have fueled this rally.”

The strong fundamental catalysts for Ethereum and the favorable technical structure for Ether has traders optimistic about the near term price trend of Ether.

Michael van de Poppe, a full-time trader at the Amsterdam Stock Exchange, said a pullback at $600 is likely. But, above it, the trader said the road towards $900 to $1,000 is open.

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