Ethereum Price Prediction: ETH Hints Major Breakout From Triangle Pattern as Post-Dencun Inflation Reversal Emerges

The Ethereum price surged 1.03% during the low-volatility Sunday trading session to currently trade at $2,438.

The Ethereum price displayed a 1.03% surge during Sunday's low-volatility trading session, currently trading at $2,438. This uptick marks a recovery from the selling pressure observed earlier in the week, which was fueled by escalating tensions between Israel and Iran. However, a concerning trend emerged as ETH Layer 1 (L1) fees hit an all-time low, reversing the prior deflationary trend and potentially hindering the crypto's advance toward the $3,000 price point.

Following the Dencun upgrade, Ethereum's L1 fees have experienced a continuous decline, reaching an all-time low in mid-2024. According to Intotheblock analytics, the implementation of EIP-4844 has slashed the cost of Layer 2 (L2) transactions by 10x.

While this shift highlights the growth of L2 solutions like Optimism and Arbitrum, offering faster and more cost-effective transactions, it also has an unintended consequence. As fewer fees are being burned, the supply of ETH has transitioned into an inflationary phase, reversing its recent deflationary trend.

In the absence of sufficient demand pressure from crypto buyers to counter the addition of supply, the Ethereum price prediction could face temporary pullbacks and increased volatility.

Post-Dencun, Mainnet fees hit an all-time low as L2 transactions skyrocketed. EIP-4844 dropped L2 costs by 10x, driving record activity.

But with fewer fees burned, $ETH has become inflationary, reversing its recent deflationary trend.

pic.twitter.com/W3p0xuKRXe

— IntoTheBlock (@intotheblock) October 6, 2024

Moreover, renowned crypto analyst Ali Martinez observed a significant decline in Ethereum large holders, specifically those with over 10,000 ETH balances. Since July, there has been a 7% decrease in whale holding, suggesting that smart money traders are largely exiting in anticipation of an upcoming price correction.

The number of #Ethereum whales holding over 10,000 $ETH has decreased by over 7% since July! pic.twitter.com/rRnIDVj2VO

— Ali (@ali_charts) October 5, 2024

Over the past two months, the ETH price has displayed a sideways trend above the $2,200 support level. This consolidation in the daily transient Chart shows the price actively resonates between two converging trends and indicates a symmetrical triangle pattern formation. Theoretically, this chart pattern guides a temporary lateral move for prevailing trends to gain momentum.

As the crypto market experienced ease from geopolitical tension in the Middle East, the Ethereum price rebounded from $2,308 to $2,440, accounting for a 5.7% jump.

If the sellers breached the pattern’s lower trendline at $2,200, the bearish momentum would accelerate and drive ETH Crash below the $2,000 level, thus delaying the $3K rally.

The coin price below the 50-and-200-day Exponential moving average supports the bearish narrative.

However, if buyers manage to replenish bullish momentum, the Ethereum price could jump 9% before challenging the triangle resistance. A potential breakout would bolster buyers for the $3,000 target.

Common Queries (FAQs)

1. Why is the crypto showing signs of struggle in its advance toward the $3,000 price point?

2. What does the symmetrical triangle pattern on the daily chart signify for Ethereum's price movement?

3. In what way did the Dencun upgrade impact the inflation rate of Ethereum?

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