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ETH3,322.64+6.66%
Ethereum is trading above $3,100 on Friday, as bulls seek to break above a two-month-old resistance line.Ethereum is gaining strength against Bitcoin as demand for the leading altcoin increases following the FOSCA upgrade.
The on-chain data shows increased interest among investors with large portfolios, while derivatives markets and exchange-traded funds remain mixed.
Ethereum (ETH) surged by more than 1% at the time of writing on Friday, extending its struggle at the confluence of a local resistance line and an overbought supply zone. Demand for the leading altcoin is rising following Wednesday's Fosaka upgrade among large-cap investors, bolstering its short-term performance against Bitcoin (BTC).
However, the derivatives markets and exchange-traded funds (ETFs) focused on Ethereum remain mixed.
Fousaka's upgrade boosts Ethereum against Bitcoin
Ethereum launched the FOSCA upgrade on Wednesday, increasing the gas limit to allow for more transactions per block and reducing potential gas fees. Additionally, the upgrade introduces a minimum block fee that prevents gas fees from dropping to zero during quiet periods, and PeerDAS, which reduces storage and bandwidth requirements for nodes while increasing block capacity eightfold.
Following the release of the new infrastructure, Ethereum rose by about 4% against Bitcoin on Wednesday, achieving a daily close above the resistance line that connects the peaks of August 24
Daily logarithmic chart for the ETH/BTC pair.
However, on the network side, auditor entry and exit rates and wait times continue to decline, despite the FOSKA upgrade, indicating a continued decline in storage momentum
Ethereum validator data. Source: Validatorqueue
On-chain Ethereum holders remain optimistic, while retail and institutional investors remain mixed.
Ethereum lacks sustained interest from both retail and institutional investors, as evidenced by derivatives data and ETF flows. CoinGlass data shows that open interest in Ethereum futures (OI) contracts stood at $37.61 billion on Friday, virtually unchanged since early November, indicating waning investor interest
Open interest for Ethereum futures contracts. Source: CoinGlass.
However, the buy/sell ratio data shows a decrease in the accumulation of bearish positions over the past 24 hours, from 54.22% on Thursday to 50.75% on Friday
Ethereum buy/sell ratio chart. Source: CoinGlass.
Meanwhile, Ethereum spot ETFs in the US saw a net outflow of $41.57 million on Thursday, following a net inflow of $140.16 million on the FOSCA upgrade announcement the previous day. The uncertainty surrounding institutional support after the upgrade is sending mixed signals to institutional investors
Ethereum real-time ETF data. Source: Sosovalue.
However, chain holders remain confident, with the cumulative holdings of large portfolio investors ranging from 1 million to 100 million Ethereum reaching 80.28 million Ethereum on Friday, up from 75.86 million Ethereum on October 1.
In general, trust among chain holders remains stable compared to support from individuals and institutions, which fluctuates relatively sharply with broader market conditions.
Technical view: Will Ethereum surpass $3200?
Ethereum is facing headwinds near $3,200 from an upper resistance line formed by connecting the October 7 and 27 highs on the daily chart. This line completes a larger descending wedge pattern, which typically leads to an upward breakout.
To confirm the breakout, Ethereum needs to maintain a daily close above the support-turned-resistance zone between $3225 and $3287. A potential breakout move in ETH could target the next resistance zone between $3643 and $3682.
Momentum indicators on the daily chart point to a neutral to bullish signal. The Relative Strength Index (RSI) at 51 is hovering near the midline, while the Moving Average Convergence Divergence (MACD) indicates prevailing bullish momentum, with the middle lines sloping upwards and approaching the zero line.
Daily chart of the ETH/USDT price.
However, if Ethereum fails to maintain the $3,000 level, it could revert to Monday's low of $2,716.