Can ETH flip the $2,500 level into support and drive bullish altcoin?

The price of Ethereum (ETH) is being closely followed as it approaches a key resistance level and transitions to support around the $2,500 mark.

Analysts are trying to determine whether ETH can hold this level to trigger a broader rally across the market.

ETH retest the 2.500 dollar mark as an important turning point

Currently, the price of ETH is trying to turn the resistance level of $2,500 into new support. This area has previously served as a barrier for most price increases in the last quarter, causing many upward attempts to be rejected.

Recent price trends show that the king of altcoins is fluctuating just above this threshold after a breakout attempt.

According to the chart analysis from Ted Pillows, the next resistance zone is between $2,800 and $2,880 – an area that has previously halted upward momentum and marked the final peak before the market corrected further.

ETH price chart | Source: TedPillowsA confirmed bounce at the $2,500 level could restore the uptrend and pave the way to test the resistance zone above.

Ethereum network activity approaches historical peak

Meanwhile, the daily on-chain transaction volume on the Ethereum network continues to increase and approaches the all-time high set in 2021.

According to blockchain data shared by Merjin Trader, the current network usage is approaching 1.5 million transactions per day.

The daily transaction volume on Ethereum | Source: MerjiTraderThis growth trend occurs without a significant increase in gas fees. This indicates that the demand for Ethereum comes from long-term users in fields such as DeFi, NFT, and the layer-2 ecosystem, rather than being the result of a short-term speculative wave.

In addition, there is no explosion in the trading volume of memecoins or fluctuations caused by special events in the current activity. Instead, this increasing trend seems to stem from the stable use of decentralized applications (dApp) and the growing number of developers as well as deployment protocols on the Ethereum network.

This trend reflects the sustainability in the acceptance and widespread use of Ethereum, rather than just a flow of capital from short-term traders.

The structure of altcoins changes after Bitcoin reaches its dominance peak

In addition, the analyst CryptoELITES notes that the dominance index of Bitcoin has now reversed after reaching a local peak around 58% — an area that marked the cycle peak in 2019.

After such dominant peaks, the crypto market often tends to see a shift in capital flow towards altcoins, leading to an increase in capital inflow into ETH and other cryptocurrencies that are not Bitcoin.

Dominance and altcoin ratio | Source: CryptoELITESubsequently, the adjusted dominance index of Bitcoin has reflected patterns that previously occurred before past altcoin rallies. ETH – with its position as the leading altcoin in terms of market capitalization and network usage, often leads such capital rotation cycles.

If Bitcoin's dominance index continues to decline, ETH may gain relative strength as investors gradually shift their focus away from the upward trend led by Bitcoin.

The altcoin season will form if ETH maintains important price levels

Currently, the Ethereum network is booming with activity, while the support area around the $2,500 level appears very solid and the Bitcoin dominance index continues to weaken. These factors occurring together in the past often paved the way for altcoin rallies.

If the price of ETH holds above $2,500 and recovers the bullish structure above the $2,800 zone, it could lead to a new altcoin rally.

In the event that these conditions converge, the entire market may be entering a phase of "altcoin season by precedent," meaning that capital is starting to flow strongly from Bitcoin into ETH and mid-cap tokens.

During such periods, the price of ETH often tends to rise, while its market dominance in the altcoin market also expands.

To further support the potential positive breakout, a recent analysis shows that ETH is being increasingly accumulated by investment institutions. Notably, there was an $80 million withdrawal on Matrixport and a $517 million purchase from SharpLink Gaming.

On-chain data from CryptoQuant also indicates that last June witnessed a record level of ETH accumulation and staking.

Minh Anh