A successful retest of this level would pave the way for a much-desired rally to the record high.
STORY HIGHLIGHTS
Ethereum price surges on optimism for the upcoming Dencun upgrade on March 13.
Industry opinion leaders believe the SEC will approve spot ETH ETF.
Holding the important weekly support at $3,200 could help shape the uptrend to $3,600 in the short term.
Ethereum price is only 33% from its all-time high of $4,878 after rallying to a 22-month peak of $3,278. The second-largest crypto has continued to sustain a bullish outlook apart from the brief consolidation in early January.
Both technical and fundamental indicators point to a larger breakout, with ETH likely to start price discovery soon.
In the last 24 hours, ETH price has sustained a 3% increase in value, 11% in a week, 24% in a fortnight, and 44% in 30 days, underscoring positive investor sentiment.
Factors Igniting The Ethereum Price Rally
The Ethereum Dencun upgrade stands out as one of the forces backing the bullish picture in ETH price. This protocol upgrade, scheduled for March 13 promises key improvements not only for Ethereum but also for the vibrant layer 2 solutions like Arbitrum and Polygon, which will benefit from reduced transaction costs through a feature called proto-danksharding.
Dencun will also increase the blockchain block size from the current 12.5 MB to 25 MB to support more transactions per block for efficient network throughput.
A new transaction format will also be enabled with the implementation of the Dencun upgrade. This will simplify the validation process and, at the same time, improve the developer experience when building applications.
After the successful implementation of the Dencun upgrade, the hype for a spot ETF will come in full swing. Ethereum price extended the rally after the approval of Bitcoin ETFs in January as investors turned their attention to the $390 billion token.
An Ethereum ETF will track the price of the crypto in real time, offering investors direct exposure to ETH without dealing with the complex nature of the crypto market like navigating exchanges and storage.
The approval of the ETF will signal the growing adoption of Ethereum as a legitimate asset class. Experts and industry opinion leaders have expressed their optimism for the potential greenlighting of the spot ETH ETF.
The CEO of Grayscale Investments, Michael Sonnenshein recently expressed his confidence in the Securities and Exchange Commission (SEC) approving the ETF.
Assessing ETH Price Technical Structure
The position of the Relative Strength Index (RSI) at 78 in the overbought area means that buyers hold the reins at the moment. Meanwhile, bulls would be looking for a weekly close above $3,200 or the black horizontal ray on the chart to steady the uptrend.
With the ongoing consolidation above $3,200 support, re-accumulation is set to occur providing Ethereum price the momentum it requires to keep moving higher.
Although highly unlikely, corrections to or below $3,000 before the Dencun upgrade would trigger major buy-the-dips moves among investors who would be speculating on the next surge to $3,600 (important weekly resistance).
