Ethereum performed exceptionally well in January and February buoyed by growing optimism for the spot ETF. Investors turned to Ethereum following the approval of Bitcoin ETFs, with many believing that it will not be long until the Securities and Exchange Commission (SEC) considers a spot ETH ETF.
In addition to the ETF, the upcoming Dencun upgrade, scheduled for March 13 could be a major market mover for Ethereum price. With this protocol upgrade, Ethereum will tackle the issue of scalability by increasing the block size from 12.5 MB to 25 MB.
Layer 2 scaling networks like Arbitrum and Polygon will benefit the most from the Dencun upgrade promising cheaper and faster transactions.
In the previous week, Ethereum moved in tandem with Bitcoin as it tested resistance in the range between $3,500 and $3,600. At the time, BTC launched above $60,000 and tested $64,000 before settling for sideways oscillation above short-term support at $62,000.
While an aggressive Bitcoin ascended above $65,000 on Monday, Ethereum struggled to clear resistance at $3,500 with the area at $3,550 emerging as a new sell-wall.
Trading at $3,490 during US business hours on Monday, Ethereum needs to close above $3,500 to convince investors that the upturned is intact. Otherwise, a longer sideways trend may start to form to allow for fresh re-accumulation to boost the next leg up targeting highs above $4,000 and the record high around $4,890.
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