Ethereum (ETH) saw a 20% surge this week, hitting a 620-day high.
The crypto community is unsure if ETH can maintain this momentum to reach $3,000 or if a market correction is imminent.
Solana’s appreciation in 2023 is highlighted, attributed to its significant decline in the previous year – almost 97%, compared to 77% for Ethereum.
Ethereum (ETH) saw a remarkable 20% increase this week, reaching a staggering 620-day high. As the crypto community watches this bullish move with bated breath, the question that arises is whether ETH can maintain this momentum and potentially reach the coveted $3,000 mark or whether a market correction is imminent.
Reasons Behind Ethereum’s Performance Compared to Solana
In a BeInCrypto conversation with Slater Heil, CEO of Composable Corp. and leader of Blueberry Protocol, information on the perceived underperformance of ETH compared to Solana was discussed.
One of the key factors highlighted was Solana’s appreciation in 2023, attributed to its substantial decline in the previous year – almost 97% compared to 77% for Ethereum.
Analyzing Fibonacci retracement levels, Solana and Ethereum retraced similarly, moving closer to their 0.382 Fibonacci retracement resistance levels. Mr. Heil suggests that in cryptocurrency markets, price often shapes the narrative, leading to the current belief that Solana has overtaken Ethereum.
Of note is Ethereum's outperformance by its betas, such as Lido DAO (LDO), Arbitrum (ARB), and Optimism (OP). This divergence can be attributed to the perpetual search for new opportunities on the part of investors and speculators.
Ethereum versus Solana: a narrative change on the horizon?
Mr. Heil highlights the dominant narrative around Ethereum, highlighting concerns about high transaction fees and a user experience seemingly geared toward large investors.
However, it highlights Ethereum's deliberate focus on security and long-term scalability, attracting investors who value security over immediate, low-cost transactions.
Anticipating a narrative shift, Mr. Heil predicts that once the Bitcoin ETF fervor subsides, Ethereum will take center stage. Strong indications were seen in the ETH/BTC pair, showing signs of a bottom amid the fake ETF approval tweet.
Technical analysis on the weekly time frame reveals Ethereum's gradual trajectory since May 2022. Breaking the critical resistance zone of $2,410 and an ascending resistance trendline after four failed attempts, ETH surged to 2,689 $ this week.
The weekly Relative Strength Index (RSI) supports this increase, entering overbought territory and indicating bullish momentum. If the rally continues, the next resistance lies between $3,340 and $3,500, a 35% increase from the current price.
