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Ethereum price has been under significant pressure throughout 2024. With volatility surging, many investors are closely monitoring the price action to determine if Ethereum can break past $3,000 in the fourth quarter. Let's take a closer look at the technical indicators and recent developments.
The monthly chart for Ethereum shows a prominent bearish trend from the $4,000 range down to its current price of approximately $2,400. A large red candlestick in September 2024 indicates a strong sell-off, which continues into early October. The monthly resistance sits around $3,000, while the support zone is closer to $2,000.
The decline from the $4,000 level in mid-2024 reflects a significant lack of bullish momentum. However, the lower volume in recent months indicates reduced selling pressure, suggesting a possible consolidation phase. If ETH can maintain stability above $2,200, a potential bullish reversal could target the $3,000 level.
The weekly chart displays a clearer picture of Ethereum’s ongoing struggle to regain momentum. ETH has been trading in a horizontal range between $2,200 and $2,800 since August 2024. The Bollinger Bands show that volatility has compressed, with ETH nearing the lower band, indicating a possible breakout soon.
The Accumulation/Distribution (A/D) line shows a slight uptick, suggesting a slow increase in buying pressure. If the price breaks above the middle Bollinger Band, which is currently near $2,800, it could signal a rally toward $3,000. However, failure to hold above $2,200 could see ETH retesting the $1,800 support level.
The daily chart reveals a more granular view of the price action. Ethereum has been struggling to stay above the $2,400 mark. Recent daily candles show low volume and a lack of conviction from both bulls and bears. The Relative Strength Index (RSI) hovers near 47.48, indicating a neutral sentiment with neither side in control.
A break above $2,500 on the daily chart could spark a short-term rally, but ETH needs to close above $2,800 to confirm a bullish reversal. The immediate support level is around $2,300. If this level breaks, the next target for bears would be $2,000.
The new Ethereum Improvement Proposal (EIP-7781), introduced on October 5, 2024, by Ben Adams, co-founder of Illyriad Games, aims to reduce block times by 33%. This change would enhance the overall throughput by 50%, making the network more efficient.
EIP-7781 proposes cutting block times from 12 seconds to 8 seconds, which would significantly improve latency for rollups and increase data capacity. The Ethereum community has received this proposal positively. Justin Drake, a researcher at the Ethereum Foundation, mentioned that the proposal aligns with Ethereum co-founder Vitalik Buterin’s broader vision.
Drake further noted that reducing block times could make decentralized exchanges like Uniswap v3 approximately 1.22 times more efficient. It could also save around $100 million in CEX-DEX arbitrage annually, leading to better execution for users. This proposal, if implemented, would likely boost investor confidence and drive Ethereum price upwards.
While EIP-7781 holds promise, some developers raised concerns about its impact on solo stakers. Shorter block times could lead to execution state growth, increasing hardware and bandwidth requirements. This could make it more difficult for solo stakers to participate, potentially hindering Ethereum’s decentralization goals.
Adam Cochran, a partner at Cinnehaim Ventures, noted that the proposal seems reasonable if gas limits per block remain unchanged. However, increased hardware requirements could exclude some solo stakers. This issue might need addressing before the community can move forward with implementation.
Market sentiment around Ethereum has been neutral to bearish in recent months. On-chain data shows a decline in active addresses and transaction volume. This reflects a lack of investor enthusiasm and limited network activity. However, the proposal of EIP-7781 could change this narrative, as it promises to improve network efficiency and reduce fees.
Recent discussions on reducing the minimum amount required to become a validator on the Ethereum network from 36 ETH to 16 or 24 ETH have also caught attention. If this change takes place, it could attract more validators, improving network security and decentralization. Such developments could bolster Ethereum’s appeal and potentially trigger a rally.
Resistance Levels: $2,800, $3,000, $3,500
Support Levels: $2,200, $2,000, $1,800
The key level to watch is the $3,000 mark. A breakout above this level would indicate strong bullish momentum and could push ETH towards $3,500. Conversely, a drop below $2,200 would suggest further downside risk, with $2,000 being the next critical support.
Ethereum faces a crucial period in Q4 2024. The technical analysis suggests a consolidation phase, with the price hovering between $2,200 and $2,800. The upcoming EIP-7781 proposal could provide the catalyst needed for a breakout above $3,000.
If the proposal is implemented successfully, Ethereum’s improved throughput and reduced fees could attract new investors and drive demand higher. However, the network must address concerns around solo stakers and increased hardware requirements to maintain its decentralization ethos.
For now, all eyes remain on the $3,000 resistance level. If Ethereum can reclaim this psychological barrier, a surge towards $3,500 and beyond becomes increasingly likely.
