Layer-2 Tokens OP, ARB, IMX Surge as ETH Shows Bullish Signs

The total market cap for Layer-2 projects jumped 5.5% over the past 24 hours, according to CoinMarketCap. As a result, the collective valuation of Layer-2 projects stood at more than $16.217 billion as of press time.

Leading the charge in this category of cryptocurrencies were Optimism (OP), Arbitrum (ARB), and Immutable (IMX). All three of these altcoins saw their prices surge throughout the past day of trading.

OP recorded the largest 24-hour increase of the three cryptocurrencies, as its price jumped by more than 23.5% in the last day. This boosted the altcoin’s value to $2.18 at press time. The latest increase in price also pushed OP’s weekly performance deeper into the green to +28.70%.

The next biggest gain was posted by ARB, after its price climbed 7.60%. Subsequently, the Layer-2 cryptocurrency’s price stood at $1.17. Although not as impressive as the gains achieved by OP and ARB, IMX still registered an impressive 3.60% gain throughout the past day of trading. This elevated its value to $1.50 at press time.

Ethereum Strength Could Be Fueling Layer-2 Rallies

A potential reason for the surge in prices for Layer-2 cryptocurrencies may be the fact that ETH is showing strong signs of continuing its current bullish move. This is after the altcoin broke above a key resistance level in the last couple of days.

Daily chart for ETH/USDT (Source: TradingView)

ETH was able to break above the $2,300 resistance level over the past 48 hours and continued to trade above this significant price point at press time. Should it close today’s trading session above $2,300, it may continue rising to as high as $2,615 in the coming few days. Traders and investors will want to note that a bullish price channel has emerged on ETH’s daily chart.

The positive channel formed after the altcoin leader recorded a series of higher lows and higher highs over the past couple of weeks. Technical indicators also supported a bullish outlook. At press time, both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) indicators were flagging bullish.

In addition to the MACD line being positioned above the MACD Signal line, the RSI line was also positioned above the RSI Simple Moving Average (SMA) line. These technical flags suggest that buyers have the upper hand against sellers. Furthermore, they also hint at a potential continuation of ETH’s positive trend in the short term.

This bullish thesis may be invalidated if ETH closes a daily candle below $2,300 in the next 72 hours. In this more bearish scenario, the altcoin could be at risk of correcting to $2,145.

Ethereum Could Break $3,000

The renowned cryptocurrency analyst and trader Michael van de Poppe predicted in one of his latest X posts that ETH could soon start to rally against the market leader Bitcoin (BTC). In the post, the analyst revealed that the best time to allocate towards altcoins is 3-8 months before a BTC halving event.

Given the fact that the next halving event is expected to take place in April 2024, van de Poppe believes now is the best time to accumulate altcoins. Moreover, he predicted that ETH could surge to above $3,000 in the first quarter of next year.

Since publishing the post, ETH has seen its price rise by 4.84%. This was a continuation of its positive weekly streak as the cryptocurrency was also up 13.41% at press time over the past 7 days as well. As a result, the altcoin market leader was trading hands at $2,375.50.

ETH had pulled back slightly after reaching a 24-hour high of $2,387.51. Despite this, it was still trading closer to this peak than its 24-hour low, which was situated at $2,225.05.