Ethereum (ETH) price is gaining strength again after a significant pullback. Despite a sideways BTC price action, the ETH/BTC pair continues to extend its gains. There are multiple fundamental and technical factors behind this strength which I will be discussing in this article.

BTC price has been stuck within a very narrow range since last week. The pioneering cryptocurrency is struggling to break above the $29,500 level. This has increased the selling pressure in altcoins, as many analysts anticipate a drop after the ongoing accumulation phase. However, on Friday, ETH to USD price once again outperformed BTC. At press time, the native asset of the biggest L1 was trading at $1877 during its New York session after rising by 0.93%.

ETH/BTC Rebounds From Fresh 52-Week Lows

Many traders prefer to trade Ethereum in ETH/BTC pair, which shows its strength against Bitcoin. The following chart reveals that ETH price plunged to its lowest level of the year against BTC on 29th June. The pair slid to $0.0608, which was last tapped in July 2022.

The lack of volatility in Bitcoin has created some buying opportunities in other cryptocurrencies, such as Ethereum. As Bitcoin consolidates, some investors are rotating their profits into Ethereum, which is helping to drive up the ETH/BTC pair.

Ethereum TVL Is Down 77% From Its All-Time High

Currently, Ethereum is by far the biggest smart contract platform in terms of daily active users and the total locked value (TVL). However, there has been a massive decrease in the TVL on the top Layer 1 protocol in the past two years. According to the DeFi Llama, the network TVL has plummeted to $25.1 billion from its 2021 peak of $108 billion. This sharp decline in the locked funds can be attributed to multiple factors.

Ethereum TVL seems affected by the recent downtrend in crypto markets. As the Ethereum price has fallen, so has the amount of value locked in its DeFi protocols. Another reason is that the network is currently facing scaling issues, leading to higher gas fees and slower transaction speeds. This has made it less attractive for users to use Ethereum DeFi protocols, contributing to the decline in TVL.

Ethereum Price Prediction

The following ETH price chart is quite self-explanatory. It is evident from this chart that there is a massive resistance above the major psychological level of $2,000. In fact, there have already been two price rejections from $2017-2140 since the start of this year.

A closer look at the chart also reveals that the price is also respecting an upward trendline. Currently, the digital asset is retesting this trendline. As long as the price remains above this trendline, Ethereum price prediction will remain bullish. In case of a strong bounce from this trendline, I expect the price to retest the 2,000 level again.

A significant line in the sand for many traders is the 200-day moving average, which currently lies at $1768. A breakdown below this key moving average will flip my outlook on Ethereum bearish once again.