Ethereum recovers above $4k and prepares transition to version 2.0: is there a chance to buy below $4k?

Ethereum, following Bitcoin, is making an impulsive upward spurt and is recovering above the significant $4k resistance area. On the one hand, this proves the stability of the current positions of the ether, but on the other hand, it does not exclude the possibility of a repeated decline to the correction area. Despite the unstable situation with quotes, the developers continue to adhere to the plan and introduce the first test functions of the 2.0 protocol.

The Ethereum project launched the Kintsugi testnet, which is the final step in the transition to version 2.0. In simple terms, this means that the developers have begun to identify vulnerabilities and problems with the imminent merger of ETH 1.0 and 2.0. The preparatory stage for the long-awaited transition to version 2.0 will have a positive effect on investor sentiment and demand for the asset.

It is worth noting that the frequent replenishment of the market with announcements of future version mergers through test launches is one of the key factors in the stability of the altcoin during market storms and corrections. Therefore, when considering the options for price movement in the following paragraphs, I will stick and root for the bullish scenario.

As of December 21, the altcoin rose in price by 6% per day and consolidated above $4k. We will find out how firmly the asset is in this support zone in the next day when the post-impulse price rollback occurs. At the same time, it should be noted that the on-chain activity of the cryptocurrency remains at a high level, while exchange stocks continue to decline. This indicates a bullish investor sentiment that has persisted since the previous ATH was set.

Institutions that treat altcoin much more carefully than Bitcoin deserve special attention. This is evidenced by the constant purchase of free volumes at any downward price fluctuation. This speaks of great interest and confidence in the asset, and therefore the likelihood of a bullish scenario is much higher, although it has one important drawback.

In case of a positive outcome (as positive as possible, since growth is inevitable in the case of ETH), the price successfully maintains an intact support zone around $4k and successfully rises to $4.1k. If this scenario is successfully worked out, ETH/USD will storm the key resistance level around $ 4.2k.

The 50 EMA line passes in this area, with a bullish breakdown of which the price will go beyond the correction range and go to conquer a new maximum. In this case, the final resistance points will be around $4.4k and at the ATH level. The main problem with the bullish scenario is the correlation with BTC, which can slow down the growth of the coin and overturn it into a bearish scenario.

In a bearish scenario, the final point of the fall should be the $3,640 mark, where the price rebounded during the last decline. The reason for the reversal of ETH/USD quotes in this range was a strong support zone and 200 EMA. However, in the event of a fall outside this support zone, the current analysis is subject to revision, as it calls into question the updating of the record within the upcoming bull market. This option is unlikely since the positions of the ether and the interest of the audience are at a sufficient level to continue the upward movement or at least minimize the possible corrective movement.

The situation around the main altcoin is calmer than with Bitcoin, and therefore a bullish scenario is more likely. In any case, we will see the final answer this week. This will largely depend on a successful/unsuccessful assault of $50k. With this in mind, it is impossible to exclude the possibility of a repeated decline over the $4k area, but it is worth considering such a decline as an opportunity for a medium-term or long-term purchase of an asset.