The Ethereum network’s rising activity indicates rally potential amid the move above the bearish pattern

• Ethereum network fees have skyrocketed by nearly 60% in the past week as investors return from vacation.
• Stablecoin market cap on Ethereum hits 18-month high as ETH recovers.
• Ethereum could rise to $3,366 if it sustains a move above the downside level.

Ethereum (ETH) rose 3% on Friday after a rise in network fees and stablecoin market cap. Meanwhile, ETH is also looking to support a breakout above a bearish wedge pattern, which could see the price rally to $3,366.

Daily Market Reasons: Growing Ethereum Network Activity Could Boost ETH ETF Demand

Ethereum ETFs witnessed a second consecutive day of negative inflows on Thursday after posting net outflows of $20.1 million. While other issuers saw zero flows, Grayscale’s $20.1 million ETHE outflows dragged the entire category into negative flows.

A potential reason for the negative flows is the historic lull in the crypto market in Q3 caused by the summer holiday season. However, the outlook for ETH may change as investors gradually return from vacations.

This is visible in a shift in Ethereum network activity over the past week, with total fees increasing by nearly 60%, according to IntoTheBlock data. Increased network fees imply increased activity within Ethereum, which could have a positive impact on price.

Additionally, Ethereum’s total stablecoin market cap hit an 18-month high on Thursday, rising to $83.31 billion. The latest sustained growth in Ethereum’s stablecoin market cap saw the price of ETH reach an annual high of $4,093 in March.

Ethereum Stablecoin Market Cap

A similar trend may occur if the Ethereum stablecoin market cap continues to grow. The increasing market capitalization of stablecoins within a blockchain network shows an increased appetite for economic activities on its platform.

ETH Technical Analysis: Ethereum is trying to break above a bearish wedge

Ethereum is trading around $3,420 on Friday, up 3.2% on the day. Over the past 24 hours, ETH has seen close to $25 million in liquidations, with long and short liquidations accounting for $3.78 million and $21.13 million, respectively, according to Coinglass data.

Ethereum is trying to break through a bearish wedge, with the upper trend line extending from July 30 and the lower trend line from August 7. A sustained move above this bearish wedge could see ETH rally towards the $3,366 level.

ETH/USDT 4 Hour Chart

The 100-day and 200-day simple moving averages (SMA) serve as rising resistance. A move above these SMAs will strengthen bullish momentum. Resistance at $2,817 could also prevent an upside rally.

The Relative Strength Index (RSI) is rising and trying to enter the overbought region. The Stochastic Oscillator (Stoch) has entered the overbought region, indicating a potential short price correction.

In the short term, more than $45.7 million worth of futures positions will be liquidated if ETH falls to $2,335, according to Coinglass data.