Ethereum Price Reclaims $2,000 on the Back of Crypto Market Renaissance

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Ethereum price edged higher on Friday, reclaiming the critical psychological level of $2,000 after hitting an intraday high of $2,129.29. Ethereum, the second largest token by total market capitalization, has been outperforming the crypto market this week and is on pace to end the week 8% higher. ETH’s total market cap jumped by 4% over the last day to $255 billion, while the total volume of the asset traded over the same period declined by nearly 10%.

ETH Price Outlook

Ethereum price is back to trading above the important level of $2,000 amid positive on-chain data and bullish crypto market sentiment. Data by IntoTheBlock shows that more than 500,000 ETH tokens have left exchanges for non-custodial wallets this month, the highest amount in three months. As such, total outflows increased to $1 billion in three weeks. This suggests that traders and investors have taken advantage of ETH’s recent dip, which has proven profitable.

The crypto market sentiment has also buoyed the Ethereum price rally this week. The global crypto market cap has increased by more than 2% over the past 24 hours to $1.44 trillion, while the total crypto market volume inched slightly lower over the same period. The Crypto Fear and Greed Index has increased to a Greed level of 72, up from 67, hinting at an increase in demand for the risk assets.

Additionally, Bitcoin’s brief interaction with $38,000, its highest level in more than a year, has boosted ETH’s price due to its close correlation. The flagship cryptocurrency has been in the green for the past few days amid the ouster of Changpeng Zhao as the CEO of Binance after he pleaded guilty to federal criminal charges presented by the US Department of Justice.

Despite being the most significant liquidity pool for crypto trading, many see Binance’s settlement as a necessary development to allow the crypto industry to move forward. Notably, some analysts have reiterated that the legal action against Binance may clear the path for approving a bitcoin ETF since the exchange’s market dominance has been a significant hindrance. Investors expect the spot bitcoin ETF approval to pump liquidity into the crypto market, sending crypto prices to new highs.

Ethereum Price Technical Analysis

The 4-hour chart shows that the Ethereum price has risen steadily over the past 24 hours, breaking above the psychological level of $2,000. Even so, the digital asset faces resistance at the $2,130 level. ETH has managed to break above the 25-day and 50-day exponential moving averages, supporting its movement. Its Relative Strength Index (RSI) has also increased to 68, suggesting increased buying pressure.

As such, I expect the Ethereum price to continue increasing in the ensuing sessions as it struggles to break above the resistance at $2,130. A break above this level would pave the way for a bullish breakout to the next resistance at $2,190, leading to subsequent gains to $2,500. Conversely, a drop below the immediate support at $2,030 might push the ETH price below the crucial $2,000 level.