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- Ethereum (ETH) experienced a 20% surge this week, reaching a 620-day high.
- The crypto community is uncertain about whether ETH can sustain this momentum to reach $3,000 or if a market correction is imminent.
- Solana’s 2023 appreciation is highlighted, attributed to its significant fall the previous year—nearly 97%, compared to Ethereum’s 77%.
Ethereum (ETH) has experienced a remarkable 20% surge this week, reaching a staggering 620-day high. As the crypto community watches this upward movement with bated breath, the looming question is whether ETH can maintain this momentum and potentially hit the coveted $3,000 mark or if a market correction is imminent.
Reasons Behind Ethereum’s Performance Relative to Solana
In a conversation by BeInCrypto with Slater Heil, CEO at Composable Corp. and leader at Blueberry Protocol, insights into ETH’s perceived underperformance compared to Solana were discussed.
One key factor highlighted was Solana’s appreciation in 2023, attributed to its substantial fall the previous year—nearly 97% compared to Ethereum’s 77%.
Analyzing Fibonacci retracement levels, both Solana and Ethereum have retraced similarly, nearing their 0.382 Fib retracement resistance levels. Mr. Heil suggests that in cryptocurrency markets, the price often shapes the narrative, leading to the current belief that Solana has surpassed Ethereum.
Noteworthy is the outperformance of Ethereum by its betas, such as Lido DAO (LDO), Arbitrum (ARB), and Optimism (OP). This divergence may be attributed to the perpetual quest for new opportunities among investors and speculators.
Ethereum vs. Solana: A Narrative Shift on the Horizon?
Mr. Heil emphasizes the prevailing narrative around Ethereum, highlighting concerns about high transaction fees and a user experience seemingly tailored for large investors.
However, he underscores Ethereum’s deliberate prioritization of long-term security and scalability, attracting investors who value security over immediate low-cost transactions.
Anticipating a narrative shift, Mr. Heil predicts that once the Bitcoin ETF fervor subsides, Ethereum will take center stage. Strong indications were observed in the ETH/BTC pair, showcasing signs of a bottom amid the fake ETF approval tweet.
Technical analysis from the weekly timeframe reveals Ethereum’s gradual trajectory since May 2022. Breaking the critical $2,410 resistance area and an ascending resistance trend line after four unsuccessful attempts, ETH surged to $2,689 this week.
The weekly Relative Strength Index (RSI) supports this increase, entering overbought territory and indicating bullish momentum. If the rally continues, the next resistance lies between $3,340 and $3,500, presenting a 35% increase from the current price.