Ethereum Price Forecast: Pectra Propelled ETH Near $3,000, But Can The Rally Continue?

The price currently sits at $2,576 and surged to $2,750 at some point this week.

Pectra makes ETH a deflationary coin by burning a portion of the network’s gas fees. In addition, it makes layer-two protocols like Arbitrum more efficient by increasing the number of blobs per ETH block from 6 to 9.

Ethereum developers expect that Pectra will make the smart contracts blockchain more scalable, faster, and cheaper to use.

The upgrade aims to solve some of the issues that have allowed competing networks like Solana and Sui to thrive and attract significant transaction volumes.

However, Ethereum is still the largest of these networks by total value locked (TVL) and stablecoin reserves.

In addition, the network is also the most decentralized option compared to its rivals. This is a key competitive edge that has allowed Ethereum to maintain its lead in this space as decentralization reduces the risk of 51% attacks.

An Overbought RSI is No Obstacle for ETH’s Rally

For a few weeks, we have been sharing an Ethereum price prediction based on a historical pattern of the Relative Strength Index (RSI) that has always been followed by strong rallies for ETH.

As we predicted initially, a bullish breakout of the token’s consolidation rectangle would lead to a retest of its former trend line support at $3,000.

The trajectory of the price has followed this prediction almost to the letter thus far but we are still 16.1% away from the target.

So, does ETH have enough fuel in the tank to rally to $3,000? At first glance, an overbought RSI may be considered a warning signal that the rally has gone too far too fast.

However, as these same historical patterns show, this is not the first time that the RSI has gotten this high and it does not necessarily mean that the price cannot move any higher.

If history repeats, or at least rhymes, the rally can still keep going even if the RSI starts to drop. This means that ETH could still reach that $3,000 target in the near term and could go even higher if FOMO kicks in as this is a major psychological threshold.

A Big Correction May Come Soon

Zooming in on the latest price action, the rally has accelerated after a golden cross between the 21-day and 200-day EMAs. Meanwhile, ETH has also moved above the 200-day EMA, meaning that the long-term price trend is now bullish.

The next catalyst that could propel ETH to much higher levels – even beyond $3,000 – would be a golden cross between the short-term EMAs and the 200-day EMA. The last time this happened, the rally accelerated and made a new all-time high just a month later.

The next key resistance to watch stands at $2,800. Back in February, the price experienced significant selling pressure when it got to this level.

Interestingly, the Fear and Greed Index back then stood at around 76. Not too far from where it is right now at 69. Investors should stay safe in these stretched conditions and avoid being overly greedy as most technical indicators are flashing warning signals that the market may have gotten ahead of itself already.

Although a push to the $3,000 level seems like a done deal at this point, it would be a good idea to start taking some profits off the table as a strong correction may occur at any point to shake off some excess leverage.