Ethereum Eyes $2K as Network Upgrades and Institutional Demand Fuel Rally

ETH’s price surge isn’t just speculative FOMO—this time, the fundamentals might actually justify the hype. Two catalysts are driving the move:

1. The Merge 2.0 upgrade slashing gas fees by 80%, turning deflationary pressure into a yield-generating machine (take notes, legacy finance).

2. BlackRock’s ETH ETF filing triggered a wave of institutional accumulation—because nothing screams ’validation’ like Wall Street’s stamp of approval.

Will it hold? The charts say yes, but remember: in crypto, even the surest bets come with a side of volatility. Proceed with diamond hands—or at least a solid stop-loss.

Network activity heats up: Is retail sentiment bullish?

Ethereum’s network activity shows encouraging trends. The number of New Addresses increased by 32.24% over the past seven days, signaling growing investor interest. 

Additionally, Active Addresses have risen by 6.96%, confirming strong participation from current holders. The Zero Balance Addresses have climbed by 120.50%, showing that retail sentiment remains high. 

Although many investors have yet to take significant positions, Ethereum’s adoption continues to expand. The increasing number of active users supports a continued upward trajectory for ETH.

Source: IntoTheBlock

Meanwhile, analysis of the recent short liquidations showed that $2.15 million in total liquidations occurred, with $643.58K coming from Binance alone. 

Naturally, if ETH breaks above $1,900, short liquidations could accelerate, fueling a potential short squeeze.

Such a move would add momentum to any rally, especially if liquidity hunters force market participants to cover their shorts.

Outflows continued as exchange supply thinned

Ethereum saw significant Outflows from Exchanges, with -4,211 ETH flowing out as of press time.

This trend, of course, pointed to increased confidence among holders, who appeared content keeping ETH off trading platforms.

With fewer tokens for sale, the setup favored further bullish continuation.

Source: Santiment

Meanwhile, Ethereum’s Funding Rate remains positive at 0.00543%, signaling a bullish market sentiment.

The number of long positions exceeds short positions, indicating that investors are confident in Ethereum’s price action. 

The positive Funding Rate reflects the market’s optimism. This sentiment aligns with Ethereum’s potential for further price increases, suggesting that the asset may continue to rise.

Is ETH ready for a bullish breakout?

Ethereum is forming a head and shoulders pattern, with key support around $1,758 and resistance at $1,836–$1,850.

If Ethereum breaks through this resistance, the price could target $2,000, marking an 8.9% potential gain. Besides, the volume trend is increasing, supporting the likelihood of a breakout.

If Ethereum surpasses this critical resistance, it could trigger a sharp rally towards $2,000. The head and shoulders pattern suggests a bullish continuation if the neckline is breached.

Source: TradingView

Conclusively, ETH’s Exchange Supply Ratio decline, strong network activity, and liquidity pool formations point to a bullish outlook.

The head and shoulders pattern and increasing short liquidations support the likelihood of a breakout toward $2,000.

With a positive Funding Rate and reduced sell-side pressure, ETH is positioned for continued upward momentum, potentially reaching higher targets in the near future.