Posted on

Ethereum Prints Modest Losses, Consolidation Before Next Big Breakout?

The future of the second-largest cryptocurrency is hampered by the US dollar index’s recovery. On Thursday, the price of Ethereum (ETH) showed just slight decreases.

Ethereum Consolidates

On July 21, price movement in the cryptocurrency market as a whole was mostly muted as traders took a day to digest recent gains and book profits after the strongest relief bounce since early June.

The Ethereum Merge has remained at the top of the list despite rumors regarding what sparked the recent spike. After a preliminary date of Sept. 19 was chosen for the mainnet Merge, the market rally accelerated.

The price of Ether (ETH), which reached a high of $1,620 on July 20, retraced to a low of $1,463 in the early trading hours of July 21, according to TradingView data, and has since recovered back above support at $1,500.

ethereETH/USD back around $1,500. Source: TradingView

Following the initial price spike caused by the Merge news, here is what various analysts anticipate will happen as Ether’s mainnet switch to proof-of-stake draws near.

Market analyst Rekt Capital posted the following chart showing the significance of Ether’s weekly finish over $1,300 and subsequent rise higher, describing the retreat on July 21 as a good development.

Rekt Captial said:

“Though #ETH could just continue higher to reach the upper orange region, it would be healthier for ETH to dip. Such a retest of the lower orange area would only increase probability of continuation.”

With this outlook in mind, the pullback on July 21 raises the prospect of a rise to $1,700 soon.

Related Reading | Ethereum Merge: How ETHBTC Could Hint At A Return Of Risk Appetite

Vitalik Hints At Future Of ETH

The co-founder of Ethereum detailed his plans for future developments on Thursday at the Ethereum Community Conference in France that go far beyond the network’s switch to proof of stake. The upgrade—often referred to as “the merge” since it will integrate the Ethereum mainnet with the proof-of-stake beacon chain—is actually the first in a series of modifications that are being planned.

Ethereum will then go through additional improvements that Buterin refers to as the “surge,” “verge,” “purge,” and “splurge” after the merging, which he believes is extremely close because “the only thing left to do is do a merge on Ropsten [test network],” he said during the conference. Buterin mentioned a goal to strengthen the Ethereum network being the reason behind the network continuous updates.

Ethereum will only be about 55% complete after the integration, which is anticipated to be finished this September.

The surge is due to the addition of Ethereum sharding, a scaling solution that, according to the Ethereum Foundation, will make layer-2 blockchains even more affordable, reduce the cost of rollups or bundled transactions, and make it simpler for users to run nodes that protect the Ethereum network. Buterin added that following the spike

Related reading | Ethereum Cruised Past $1500, Is There A Possibility To Retrace To $1200?

Featured image from Shutterstock, chart from TradingView.com

Posted on

Ethereum Merge: How ETHBTC Could Hint At A Return Of Risk Appetite

The merge is near, so it’s Ethereum time to shine. The eternal second most popular cryptocurrency by market capitalization has been outperforming bitcoin for the last few days. Is the reason the return of the market’s appetite for risk? Or is it just the fact that Ethereum’s developers announced a specific date for the mythical merge? Let’s examine the numbers, the facts, and the experts’ opinions to figure out exactly what’s going on.

In The Weekly Update, Arcane Research’s newsletter, they point out that the ETHBTC pair surged “ from 0.053 on July 12th to 0.7 on July 19th.” It’s at “levels not seen since mid-May,” but why? According to Arcane, it “might be related to increased risk appetite in the market, evident by sharp altcoin recoveries across the board.” They identify another factor, “Celsius repaid its DeFi loans. This contributed to reducing the downward gravitational pull enforced by potential liquidations and contagion-related uncertainty.”

And then, of course, there’s the merge.

What Do The Experts Say About The Merge?

The facts are the facts, Ethereum is on a roll. In a previous report, NewsBTC analyzed the state of the market:

“Ethereum has now broken above an important technical point. After trending below the 50-day moving average for the better part of last month, ETH has flipped this technical level and is now sitting comfortably above it. The implication of this has been a complete 180-degree turn from bearish to bullish, especially during the short term.”

As for the probable cause, Arcane Research already named two. The main one, though, is the possibility of the merge. Back to The Weekly Update:

“On Thursday, July 14th, the Ethereum Foundation member Tim Beiko suggested Sept 19th as the tentative launch date for the merge. This might have benefited ETH, leading to last week’s surge. Following the announcement, Lido’s staked ETH token has neared ETH parity.”

In another NewsBTC report, we quoted another expert trying to make sense of the situation. According to Youwei Yang, director of financial analytics at StoneX, the causes for the recent surge are:

“The first is the recently announced time for the Ethereum “merge” update, which should make the network significantly more energy-efficient. Yang claims that the “calming” of macroeconomic anxieties is the second.”

ETHBTC price chart on Coinbase | Source: ETHBTC by The Weekly Update
Is Ethereum’s Merge a “Buy The Rumor” Event?

The change from Proof-Of-Work to the Proof-Of-Stake consensus mechanism does use less energy, but brings its own set of problems with it. Discussing those is beyond the scope of this article. The important part of the equation for Ethereum holders is that the merge will finally bring native staking to the blockchain. The thousands of ETH already locked into the Beacon Chain will finally produce real results, and a new kind of user, the validators will rise. 

Is this enough to justify the price surge? Absolutely. Is it guaranteed that the merge will happen on September 19th? Probably not, considering Ethereum has postponed its difficulty bomb five times already.

ETH price chart for 07/20/2022 on Bitfinex | Source: ETH/USD on TradingView.com
Is The Contagion Event That Sent Everything To Red Over?

According to Arcane, “contagion seems to be resolving now, with prices stabilizing. This recovery may be viewed as a healthy confirmation of the market normalizing as market stress settles down.” Their interpretation of the situation might be overly optimistic, though. A pseudonymous Twitter user that identifies himself as “a trader/defi analyst at a major crypto fund and use Nansen almost daily,” thinks more pain is on the way with or without the merge.

The Three Arrows Capital trial is still unfolding, and “3AC still has with thousands of ETH. It’s very likely that all of these wallets are going to be liquidated in order to pay back creditors.” If that happens, it’s “going to cause a harsh sell-off across the broader crypto ecosystem, setting up the next catalyst down.”

Sorry to rain on Ethereum’s parade, but those are the facts. Good luck with the merge, though.

Featured Image by Loic Leray on Unsplash | Charts by TradingView and The Weekly Update

Posted on

Ethereum (ETH) Shifts To High Gear – Crosshair Locked At $1,250?

The price of Ethereum (ETH) has continued to trade upwards over the past several days, following a dramatic reversal from the previous low near $1,000 during the last seven days.

Wednesday saw the ETH/USD pair surge to the $1,175 barrier level, recording a clear higher high. As of this writing on Thursday, ETH was trading at $1,218 — an increase of 10.6 percent over the previous week, according to data from Coingecko.

The announcement that Ethereum developers successfully executed The Merge on the Sepolia testnet boosted the price of Ether by 5 percent over the past 24 hours, data show.

Suggested Reading | Sandbox (SAND) Having A Blast With 12% Spike In 24 Hours

Ethereum Gets Some Energy From The Merge

The Merge will facilitate the transition of the Ethereum network to the Proof-of-Stake (PoS) network. Proof-of-stake protocols are a type of consensus mechanism for blockchains that pick validators proportionally to their holdings of the corresponding cryptocurrency. This is performed in order to circumvent the computational expense of proof-of-work techniques.

The second-largest cryptocurrency in the world was subject to intense selling pressure earlier this week. Since early April, the bears have dominated the market fully.

The support at $1,000 has prevented additional Ethereum price declines over the past week. The question now is whether a short-term ascent is possible or not.

In recent months, Ethereum (ETH) and the broader cryptocurrency market have functioned in an environment marked by significant inflation, with the United States Federal Reserve taking steps to implement high interest rates.

ETH total market cap at $146 billion on the daily chart | Source: TradingView.com
Ethereum Next Target: $1,250

As fears of an economic downturn have intensified, riskier assets such as Ethereum have been badly affected, with ETH temporarily dipping below the $1,000 support zone just last month.

Thursday’s Ethereum price analysis is bullish, as money managers anticipate additional gains after consolidation ended and a break above $1,175 occurred. Hence, the ETH/USD pair is anticipated to continue climbing and approach the $1,250 resistance level.

Suggested Reading | ATOM Rises To Multi-Week High, Daily RSI Shows Bullish Pattern

Despite Ethereum’s significant price fall since the beginning of the year, the CoinMarketCap community forecasts that the decentralized currency will trade at an average price of $2,529 on July 31, 2022.

Meanwhile, today’s Ethereum price analysis is positive, as overnight gains above the resistance at $1,175 were sustained. Consequently, ETH/USD will likely continue its ascent and aim for the $1,250 resistance. If this level is breached, we anticipate a highly bullish remainder for July.

Featured image from Mashable, chart from TradingView.com

Posted on

What Ethereum 2.0 Looks Like As Vitalik Buterin Celebrates Its Birthday

The Ethereum 2.0 upgrades of the consensus layer built by multiple teams in the ecosystem promise to bring a “more scalabe, more secure, and more sustainable Ethereum”, and now Vitalik Buterin celebrates 1 year since the proof-of-stake Beacon Chain went live. Eth2 or Serenity aims to “support 1000s of transactions per second” so the high gas fees problem can be solved.

The Beacon Chain, one of  Ethereum 2.0’s distinct sections, has allowed users to be Eth2 validators by staking Ethereum, reportedly earning up to 10% annually, diminishing miners for transaction validation, and adding new blocks.

Ben Edgington, the lead product owner of the Teku Eth 2.0 client, had explained that “Slashing penalties were reduced at the start of the Beacon Chain to increase stakers’ confidence. Now that we are all much more comfortable with staking, penalties are gradually being increased towards their ‘crypto-economically correct’ values.”

The August update in the London hard fork proceeded to implement EIP-1559, changing the transaction fee system. Like so, the ETH burning started, which now sees a total of 353,615.10 ETH burnt during the past 30 days with a burn rate of 8.19 ETH/min. The general expectation is that if ETH supply gets limited, its price will likely increase.

Related Reading | Over 1 Milllion ETH Has Been Burned Since Ethereum EIP-1559

Eth 2.0 Roadmap At The Beacon Chain’s Birthday

The next stage, The Merge, is possible to happen around May or June next year if the code is completed by February. This will ‘merge’ the Beacon Chain into the mainnet. As it has been explained, it is meant to finalize the transition to PoS, “Ethereum’s history on the PoW network will be preserved as the PoS consensus layer is merged in as a replacement for PoW.”

Buterin Vitalik publishes an updated roadmap diagram of Ethereum protocol development’s current state

Tim Beiko stated that “the Arrow Glacier upgrade is scheduled for block 13,773,000, which is expected on December 8, 2021”, and called for users to upgrade their nodes. He expects the Kintsugi devnet to go live early this month, this is intended to “implement a release candidate design for The Merge”, which would be followed by “testing, risk management, and governance”.

Both Beiko and Edgington have said that Ethereum devs are mainly focused on the Eth2 final steps.

The move to proof-of-stake will not immediately provide any significant extra throughput to the Ethereum chain, so I don’t expect it to have a measurable effect on gas prices. The scalability strategy in Ethereum now revolves around layer-two solutions like the various roll-ups that are currently being deployed. Once The Merge is done, we will focus on providing data shards within the Ethereum protocol that will allow roll-ups to scale massively.

Obol Labs image tweeted by Collin Myers

Project lead of Obol Labs, Collin Myers, was glad to see Distributed Validator Technology (DVT) “on the top” of Vitalik’s Eth2 roadmap, and explained it as a new infrastructure that enables “Active-Active redundancy across Eth2 infrastructure deployments”, and suggested “a world where validator key theft becomes nearly impossible due to applied cryptography”.

We believe a more resilient Ethereum can be realized through a collaborative infrastructure protocol that protects against the disappearance of a few network operators. DVT can an enable this by allowing a group of network operators to act as one single validator together – something we like to call a multi-operator validator.

Related Reading | Ethereum Rallies 5%, Why ETH Could Surge To New ATH Above $5K

 

Ethereum price at $4,536 in the daily chart | Source: ETHUSD on TradingView.com