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Ether (ETH) has surged over the past few weeks, eliciting significant attention and bullish sentiment from investors, particularly the smart money segment.
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The recent rally saw ETH breaking through the psychological barrier of $3,000, signaling potential continuation of upward momentum as interest from major investors grows.
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A quote from a COINOTAG source states, “The latest surge in ETH’s price, paired with increasing network activity, paints a positive outlook for the altcoin.”
Increased smart money sentiment boosts Ether’s price outlook as it approaches key resistance levels, signaling a potential rally continuation.
Growing Network Activity Signals Strength for Ether
The remarkable momentum behind Ether’s price surge can be attributed to a notable increase in network activity. This uptick in user engagement has been reflected in both daily active users and transaction counts on the Ethereum blockchain. As per data from Glassnode, the number of daily active addresses on Ethereum rose from 377,065 on October 27 to 487,941 by November 19.
This trend is indicative of a vibrant ecosystem as participants engage across various chains, including Polygon and Arbitrum. Furthermore, Ethereum’s daily transaction count has also seen a stark increase, reaching 1.29 million on November 15, significantly up from 962,160 less than three weeks prior. Such surge in activity strongly suggests that investors are actively participating not only in trading but also engaging in decentralized finance (DeFi) applications and other innovative projects within the network.
Increased Usage of Decentralized Applications and TVL Growth
This heightened level of engagement can be attributed to the rising adoption of decentralized applications (dApps) within the Ethereum ecosystem. In tandem, the Total Value Locked (TVL) within Ethereum’s DeFi platforms has surged by 25% since November 5, signaling confidence and increasing economic activity within the blockchain landscape. As users navigate through DeFi protocols, the cumulative impact on Ether’s value becomes increasingly pronounced, encouraging further speculative interest.
Smart Money Sentiment Reflects Confidence in Ether’s Upside Potential
Recent analyses have underscored the growing sentiment surrounding Ether, particularly among institutional and experienced investors, often referred to as “whales.” According to Market Prophit, the sentiment score for smart money observed a heightened reading of 2.28, strongly contrasting with the more muted score of 0.06 for the wider public. This stark divergence indicates that while retail investors may be cautious, seasoned investors exhibit substantial confidence in ETH’s future price movements.
The influx of institutional interest reflects a broader market trend where experienced entities recognize the potential for significant upside. Such confidence could be an encouragement for potential investors to consider entering positions ahead of a possible rally.
Technical Insights: U-Shaped Pattern Forecasts Further Price Gains
The recent price action of Ether has led to the formation of a U-shaped recovery pattern on the four-hour chart. For ETH to maintain its bullish trajectory, it is critical that it holds within the bounds of this pattern. A breakout above the neckline positioned at $3,376 could serve as a launchpad for a bullish target approximately at $3,735—a potential 20% increase from current valuations.
Conversely, if ETH experiences a drop below the $3,100 mark, it could retest the U-shaped bottom around $3,000, which has coincided with strong demand signals based on data from IntoTheBlock. Here, around 3.1 million ETH were acquired by roughly 3 million addresses, offering a firm support level. For Ether to realize its full potential, overcoming resistance at $3,200 is crucial, as approximately 6.1 million ETH were previously bought by roughly 4.25 million addresses in that zone.
Conclusion
The confluence of increasing network activity, rising smart money sentiment, and a promising technical setup makes a compelling case for Ether’s continued strength in the near term. With surging engagement across Ethereum’s ecosystem and significant price levels to break, ETH boasts a critical opportunity to advance further. Investors should remain aware of both support and resistance levels as they navigate this volatile market landscape. The upcoming weeks may indeed prove pivotal for Ethereum’s trajectory, shaping its course within the broader cryptocurrency market.
