Ethereum Reclaims $2,040, Faces $2,300 Resistance

Ethereum [ETH] has recently shown signs of recovery, reclaiming its realized price at $2,040, which historically indicates the start of a bullish trend. At the time of reporting, Ethereum was trading at $2,064.80, reflecting a slight decrease of 0.10% over the past 24 hours. This price movement suggests that Ethereum may be entering a recovery phase after a prolonged bear market.

The Market Value to Realized Value (MVRV) ratio for Ethereum stood at approximately 1.02, indicating that while the cryptocurrency is in a recovery phase, it is not yet overvalued. Historically, MVRV ratios below 1 signal a market bottom, while ratios above 2.4 indicate overvaluation. Ethereum's current position suggests a cautious optimism, as it is not yet overvalued but faces significant resistance at the $2,300 level. This level is a critical barrier that ETH must clear for a sustained bullish trend, according to the MVRV Extreme Deviation Pricing Bands. Ethereum is also trading within a falling wedge channel near the upper boundary, making the price action around $2,300 pivotal in determining whether the recovery continues or stalls.

Whale activity continues to support the mid-term bullish case for ETH, with notable institutional interest. For instance, BlackRock recently accumulated 1.25 million ETH worth around $2.5 billion. However, on-chain metrics present mixed signals. Ethereum’s exchange reserves increased to 18.375 million ETH, up 0.18% in the last 24 hours, which may suggest growing sell-side pressure as more ETH is being deposited into exchanges. This could be a precursor to potential profit-taking. Meanwhile, user activity has remained strong, with 20,913 active addresses recorded, a 0.99% hike over the same period. This uptick in active wallets hints at sustained network engagement, a positive sign for ETH’s fundamental health. Conversely, Ethereum’s gas usage dropped sharply to 2.19 billion ETH, a steep decline from recent highs near 22 billion. This could reflect lower transaction volumes or a fall in smart contract execution, potentially signaling a short-term cooldown in network activity.

Ethereum now faces a critical resistance zone between $2,200 and $2,250. Breaking above this zone could pave the way for a retest of the $2,400-level. However, if ETH struggles to maintain its momentum, it could face a pullback to the $2,000-support level. Therefore, market participants will need to watch for signs of either a breakthrough or a potential reversal. According to the analyst's forecast, Ethereum has the potential to break through the $2,300 resistance level, but overcoming it will require sustained buying momentum and the clearing of key barriers. Given the prevailing market conditions, Ethereum is likely to face challenges in breaking this resistance in the short term.