Ethereum prices rose 7% on Wednesday to a three-week high on a broad market rally and strengthening stablecoin supply on the network.
Ethereum (ETH) prices rose 9% on Wednesday to a multi-week high of $2,257, as the overall crypto market recovered following news that the United States and Iran had agreed to a two-week cease-fire and opened the Strait of Hormuz within that period, according to data from crypto.news. The two countries will also discuss a framework for a permanent end to the war.
As tensions eased, oil prices fell below $100 a few days later. This alleviated investor concerns about runaway inflation while increasing appetite for risky assets, leading to Ethereum’s rally today.
In addition to macro tailwinds, on-chain data points to strengthening fundamentals within the Ethereum ecosystem. According to blockchain analysis firm Token Terminal, the total amount of stablecoins issued on the network has reached an all-time high of $180 billion.
The company said in a recent report that Ethereum currently accounts for nearly 60% of the world’s stablecoin supply, and that figure has increased by 150% in the past three years.
Stablecoins are widely considered to be the backbone of decentralized finance. Therefore, a sudden increase in stablecoin supply automatically means an increase in overall network activity.
This surge in activity could position Ethereum as the primary payment layer for stablecoins and further increase interest from retailers and institutional investors.
On the daily chart, Ethereum price is trading above the support of the uptrend line that it has respected since early February of this year. Every time the token price fell to this critical level, bulls stepped in to buy the dip and push the price higher.
Focusing on technical indicators such as MACD and RSI provides a more grounded view that the token will maintain a higher leg in the coming sessions.
In particular, the MACD line is sloping upward and above the zero line, indicating that bullish momentum is increasing. Furthermore, the RSI is also trending upward, forming an upward channel. This means that although the token is increasingly overbought, it is still in a strong recovery phase.
For now, $2,384 serves as the next key resistance level to clear. A decisive breakout of this point along with strong volume could pave the way for a rally towards the $2,500 psychological barrier.
Conversely, if Ethereum price falls below $2,200, it could revisit the $2,100 support zone, where the long-term trend line is currently located.
