Ethereum price has underperformed Bitcoin and other popular coins like Ripple and Solana this year.
Ethereum (ETH) was trading at $3,400, down by nearly 20% from its highest level in December last year. This decline coincided with controversies surrounding the Ethereum Foundation and its token sales.
ETH has also dropped as balances on exchanges have continued to rise, while the popular buy-sell ratio on Binance has remained bearish. Still, Ethereum has several catalysts that may push it to $5,000.
Ethereum Pectra upgrade
The first major catalyst for Ethereum’s price is the upcoming Pectra upgrade, which is expected to occur in March. This will be one of the biggest upgrades in Ethereum’s history, introducing several crucial features.
The first feature will bring features like transaction bundling and gas sponsorship. It will also introduce the maximum effective balance, meaning that staking rewards will be added to a validator no matter their size.
Additionally, the Pectra upgrade will increase blob throughput, adjust calldata costs, and enable execution layer triggerable exits. Historically, cryptocurrencies often see price increases ahead of major updates.
4/ EIP-7691: Blob throughput increase
Blobs have been at capacity for many months now which has limited scalability for rollups/layer 2’s and increased tx fees for users.
With EIP-7691, the blob count will be increased from 3/6 to 6/9, giving increased scalability to rollups…
— sassal.eth/acc 🦇🔊 (@sassal0x) January 24, 2025
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ETH’s open interest is rising
Meanwhile, Ethereum’s open interest in the futures market has been rising, suggesting a potential price surge in the coming weeks. The chart below shows a divergence between Ethereum’s price and its open interest. While Ether has dropped nearly 20% from its highest level in November, open interest has continued to climb.
ETH open interest | Source: CryptoQuant
Ethereum price has strong technicals
ETH price chart | Source: crypto.news
The daily chart shows that Ethereum’s price has strong technical indicators, which could push it significantly higher in the longer term. ETH has formed a falling wedge chart pattern, composed of two descending and converging lines, which is widely considered a bullish signal.
Ethereum has also formed an inverse head-and-shoulders pattern, with its neckline at $4,082. The left and right shoulders are around the $3,000 level. This pattern frequently precedes substantial price gains.
Furthermore, the recent retreat aligns with the fourth phase of the Elliott Wave pattern. This phase is typically followed by a bullish fifth wave.
As a result, Ethereum is likely to experience a bullish breakout, with the initial key level to watch at $4,082. A break above this level could lead to further gains, potentially testing the key resistance at $4,800, its all-time high. Beyond this, ETH could surge toward $5,000.
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