Ethereum's bullish momentum is gaining ground as it breaks free from weeks of trading below the $3,000 mark, a level that had remained elusive since February 2. The surge in price comes as capital shifts away from Solana and flows into Ethereum, fueled by stablecoin inflows and a rising Total Value Locked (TVL) boosting its upward trajectory.
The price chart for Ethereum paints a promising picture with short-term Exponential Moving Averages (EMAs) trending upwards, hinting at a potential golden cross formation that could propel ETH towards the $3,020 mark. If this trend persists, a 22% surge in ETH price could be on the horizon, while a failed breakout might necessitate a retest of crucial support levels.
Amid the growing hype around Solana meme coins, data analysis from Lookonchain indicates a significant transfer of capital towards Ethereum. Over the past week, stablecoin holdings such as USDC and USDT on Ethereum witnessed a $1.1 billion increase, whereas $772 million in stablecoins exited Solana.
This transition has been triggered by concerns surrounding Solana's meme coin ecosystem, notably with the launch of the LIBRA meme coin, which raised questions about the sustainability of the Solana network. As uncertainties loom over key players like Jupiter, Pumpfun, and Meteora, investors are recalibrating their portfolios in favor of Ethereum.
The influx of liquidity into Ethereum is not just limited to stablecoin movements but is also reflected in the rising TVL of the Ethereum network. While Solana's TVL has been on a downward trajectory post its peak on January 18, Ethereum's TVL has been steadily climbing, indicating a growing preference for Ethereum over its rival blockchain.
With Ethereum poised for further inflows and potential growth in DeFi activities, trading, and new token launches, the outlook remains positive for the second-largest cryptocurrency. As Ethereum consolidates its position, Solana faces the challenge of restoring investor confidence to stem the current capital outflows.
Looking ahead, the possibility of a 22% upside for Ethereum presents an optimistic scenario, with the price chart showing signs of a potential breakout above $3,020. However, any downside risks could see Ethereum testing support levels at $2,551 and $2,160, necessitating a delicate balance between bullish momentum and key support zones for the cryptocurrency's future trajectory.