Ethereum tests $4K, within striking distance of record highs

Whether you think the current hullabaloo over NFTs is a clear sign of an irrational mania or the early innings of a massive trend (…or both!), it’s undeniably bullish for ETH...

Crypto 7

Ethereum has had quite an incredible past year.

At this time last year, we were in the midst of “DeFi Summer” for the world’s second-largest cryptoasset, with individuals borrowing, lending, insuring, trading, and “yield farming” a veritable explosion of ERC-20 tokens across the decentralized finance ecosystem.

Then the price of ETH, Ethereum’s native token, rocketed a stunning 900% higher in just six months, rising from below $400 to nearly $4,000 from the start of November through the end of April.

This opened the door for “JPEG Summer” or the non-fungible token (NFT) craze that’s seen a piece digital artwork go for nearly $70M at auction, several 7-figure CryptoPunk sales, and now, in a callback to the pet rock craze of the late 1970s, even generic images of rocks are regularly changing hands for well over $1M.

*See my colleague Rebecca Cattlin’s primer, “What are NFTs?” for more on the exploding demand for non-fungible tokens*

Whether you think the current hullabaloo over NFTs is a clear sign of an irrational mania or the early innings of a massive trend (…or both!), it’s undeniably bullish for ETH, where the vast majority of NFTs are minted and traded.

Meanwhile, thanks to Ethereum’s London Hard Fork and EIP-1559 upgrade, every one of these transactions are is “burning” ETH, bringing the cryptocurrency’s inflation rate down to roughly 1% over the last month, below even that of rival Bitcoin. If Ethereum maximalists are to be believed, the supply of Ethereum may even turn deflationary early next year once the network shifts from proof-of-work to proof-of-stake security under the scheduled Ethereum 2.0 upgrade.

Source:, StoneX

ETH/USD Technical Analysis

From a technical perspective, ETH/USD remains in a clear longer-term uptrend, and after consolidating in the $2,000 area through the middle of the year, the short-term trend has also shifted back in favor of the bulls. That said, the 14-day RSI indicator is showing a bearish divergence, signaling waning buying pressure on the most recent rally and an elevated probability of a short-term pullback over the next week or two:

Source: TradingView, StoneX

Nonetheless, with adoption growing rapidly, major protocol improvements on the horizon, and an established technical uptrend, traders will likely look to buy any near-term dips toward previous-resistance-turned-support near $3350 for an eventual rally to fresh record highs. Only a conclusive break below the August range low around $2950 would erase the current bullish bias.

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