The Ethereum market is seeing renewed excitement following the Pectra upgrade, boosting trading volumes by 46%. Improvements to the Ethereum Virtual Machine and changes like allowing recipients to cover gas fees could make ETH more defined. Traders eye $3,000 as a target, with indicators suggesting strength in this bullish cycle. However, caution is needed with overbought signals emerging.
The Ethereum market has been buzzing lately, especially since the Pectra upgrade, which has sparked a significant 46% increase in trading volumes. This upgrade is already showing promise by enhancing the Ethereum Virtual Machine (EVM), making it more scalable, faster, and cheaper. Notably, this update also introduces a deflationary aspect for ETH since a portion of transaction fees will be burned, potentially improving its long-term value.
Pectra also opens up new avenues for Ethereum by enabling users to collect rewards on up to 2048 staked tokens. This could attract larger validator pools, ultimately enhancing network efficiency. Plus, the upgrade has increased the maximum number of blobs—essentially, data chunks included per block—from 6 to 9. This is expected to hasten transactions for layer-two protocols like Arbitrum while helping to cut down on fees.
Another noteworthy change is the possibility for recipients of transactions to cover gas fees. This is a significant development, addressing the issue where wallets lost functionality if they didn’t have enough ETH for fees, thus broadening usability.
Today’s strong upward trend marks the second significant single-day gain for Ethereum in recent weeks. Early on April 22, ETH managed to climb above its 21-day exponential moving average (EMA) and has maintained a position above this key indicator ever since. There was some concern about weakening positive momentum leading up to the deployment of Pectra, yet today’s surge has pushed ETH past its point of control (POC) of $1,850, giving bulls increased confidence in their grip on the price.
In prior analyses, a price target of $3,000 was set for ETH following its breakout from consolidation patterns and when the token exited oversold levels in the Relative Strength Index (RSI). Historically, similar situations have led the price to rebound to between $3,000 and $4,000. Recent bullish performance supports this outlook.
Next on the radar is the 200-day EMA, currently at $3,056, signifying a potential upside of 54.7% from current price levels. Momentum indicators also suggest a bullish trend, with the RSI nearing overbought territory. Coming out of a protracted downtrend, this paves the way for a bullish cycle.
When examining the hourly chart, the structure looks encouraging, allowing for potential pullbacks where late buyers could join the rally. There are at least two sizeable fair value gaps (FVGs) that may act as support if prices dip soon. Fair value gaps usually attract prices as traders look to fulfil existing buy orders, which might trigger strong upward movements if volumes are sufficient.
However, traders should be cautious. The RSI is already in overbought levels, and the MACD’s histogram indicates a slowdown in positive momentum. This raises the likelihood of a short-term drop. Still, given the prevailing market trend, entering long positions might yield rewards as bullish sentiment in the market appears quite strong.
