Watch these Ether price levels after cryptocurrency surges to 3-month highs

Ether (ETHUSD), the native cryptocurrency of the Ethereum blockchain, rose to its highest levels in more than three months on Monday, boosted by optimism about the prospect of a favorable regulatory outlook under the Trump administration and record inflows into newly launched spot Ether exchange-traded funds ( ETFs).

In particular, investors believe that reduced regulatory barriers could benefit Ethereum by increasing the adoption of decentralized finance (DeFi), a burgeoning peer-to-peer financial system that uses the cryptocurrency’s blockchain to conduct transactions using smart contracts.

Spot Ether ETFs recorded net inflows of more than $215 million in the three days after the election, according to data from the crypto analysis website CoinGlasstheir highest three-day cumulative windfall since launch in late July.

Ether is up about 38% over the past week, trading at around $3,320 recently, pushing year-to-date gains to about 45%. Despite the recent rise, Ether has underperformed bitcoin (BTCUSD), which has more than doubled in price since the start of the year.

Below we take a closer look at Ether’s chart and use technical analysis to find key price levels to watch out for.

Descending Channel Breakout

After a period of prolonged accumulation, Ether’s price broke out of a six-month descending channel late last week on above-average trading volume, with gains accelerating over the weekend.

While the Relative Strength Index (RSI) confirms the cryptocurrency’s bullish momentum with a reading above the 70 threshold, the indicator is also flashing overbought conditions that could trigger price volatility in the short term.

Let’s identify several key technical levels on Ether’s chart that investors can follow.

Key resistance levels to watch

The first overhead level to see is around $3,650. Investors who have bought Ether at lower levels can look to book profits in this region near a trendline connecting countertrend rebounds on the chart in late March, early April, and mid-June.

A decisive breakout above this area could spark a rally up to the $4,090 region, a short position that would likely provide significant resistance near the cryptocurrency’s prominent March 2024 swing.

Important support levels to monitor

During the dips, investors should initially monitor how Ether’s price reacts to the $3,250 level, an area where the cryptocurrency may encounter support near a trendline connecting a series of similar trading levels on the chart between April and July.

Selling below this level could trigger a decline to around $2,950, a location just above the descending channel’s upper trendline, where investors can look for buying opportunities near the closely watched 200-day moving average and a series of lows that formed at the chart in April, May and July.

A deeper retracement could see Ether revisit lower support around $2,720. This area may attract buying interest near a multi-month horizontal line connecting multiple highs from early January to late October.

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As of the date this article was written, the author does not own any of the above securities.