Ether on track to potentially breach the $4,000 resistance level soon, an analyst says

An earlier version of this article incorrectly stated that Bitcoin gained about 26% in the past 24 hours. It has been changed to 3.1%.

Ether is trading above $3,700 Wednesday, the first time since May, when the crypto reached its all-time high.

The most recent rally for the asset is partly driven by the networks EIP 1559 (Ethereum Improvement Proposal) upgrade, which reduced supply of the token, and the growth of decentralized finance, or DeFi, and nonfungible tokens, NFT, which are mostly developed on the Ethereum blockchain, according to traders and analysts.

Meanwhile, bitcoin
has continued to trade sideways. The largest cryptocurrency gained roughly 3.1% for the past 24 hours, recently trading at $48,600, according to crypto data platform Messari.

What are traders saying about bitcoin?

Bitcoin remains in the consolidation phase, despite that it notched a gain of 23% over the past 30 days, Messari data shows.

Levels to watch on the topside are $49,300 and last weeks high of $50,500. A break higher will target $57,500, Matthew Blom, global head of sales and trading at crypto exchange EQONEX
wrote in a Tuesday note.

Volatility in bitcoins price has been falling, which is conducive to a buildup toward sustainable rallies, Blom wrote. However, the market is expecting increasing activity and volatility entering September, as traders come back from summer vacations and return to their desks.

What are analysts saying about ether?

Ether is on track to potentially breach the $4,000 resistance level, provided the obvious stack up continues, Nick Agar, founder of cryptocurrency firm AXIA Coin, wrote in an email to MarketWatch.

A number of metrics indicate positive sentiment, including the volume of large transactions of ether, which reached $16.2 billion, the highest since June 22, crypto analytics firm IntoTheBlock wrote in its Telegram channel.

The number of addresses with holdings in ether for over one year is also reaching an all-time-high, according to IntoTheBlock.

Since the implementation of EIP 1559 on Aug. 5, the reduction of ether supply has been fueling ethers price rallies. With Ethereums recent burn rates resulting in over $561 million burnt away from circulation, a basis has been formed for the increasing accumulation of the token by investors, Agar wrote.

Other cryptocurrencies worth watching:

  • FTX Token has gained more than 30% over the past 24 hours, as crypto exchange FTX.US announced Tuesday its plan to acquire LedgerX, a U.S. regulated crypto derivative exchange.

  • Fantoms FTM token reached an all-time high of about $0.97 today, as the blockchain platform recently announced an incentive program to distribute a total of 370 million FTM to protocols developed on Fantom.

  • Solana, the coin associated with the smart-contract blockchain, was recently trading at $113, up 5.6% over the past 24 hours. The number more than tripled that at the start of August, as investors bet on blockchains that are considered Ethereums competitors.