ETH price tethers closely above $230, will bears win?

Ethereum aims to be the world’s supercomputer. ETH price is just one facet (of the many) that spurs discussion. There are factors to gauge performance and activity like Gas transactions, dApp development, and network usage.

One key metric that users tend to follow is activity. And the best way of measuring activity is the network’s resilience and Gas rates.

Gas is the payment made when sending transactions or activating a smart contract. Resilience is the network’s ability to resist clogging.

Clogging has been costly

Clogging has been consequential in recent days judging from MakerDAO blip that saw its foundation lose $8 million.

As the network slowed down, Maker’s smart contracts took longer to execute, a loophole that some opportunistic users placed zero bids for ETH collateral. This was after ETH prices slid by over 40 percent forcing the DeFi dApp to liquidate collateral and to recover loans.

To resolve these clogs, Ethereum plans to shift to a Proof-of-Stake (PoS) consensus algorithm with shards.

Supporters claim this will be a game-changer. Towards that end, the Onyx test network is now live as trials towards the final launch of Ethereum 2.0 gains traction.

Ethereum gas usage at an all-time high

Ahead of the anticipated launch are wins that boost the ETH price. First is the perceived demand following a spike of Gas to new highs according to streams from CoinMetrics—a blockchain analytics firm. The more Gas is used, the more the demand. This a net positive for ETH price.

Aside from this development, the number of unique ETH addresses soared past the 100 million five short years after launching.

ETH price analysis

Ethereum Daily Chart for June 17, 2020

Week-to-date, the ETH price remains in consolidation against the greenback. It is down three percent in the last week and stable on the last trading day. ETH is nonetheless stable against Bitcoin in the same time frame.

Technically, there is a flicker of hope for buyers. In the daily chart, the ETH price is trending above $230 after rejecting bear attempts to drive prices lower following the double bar bear reversal pattern of June 10-11, 2020.

As such, ETH remains has been trading within tight ranges inside June 10, 2020, syncing with bulls of the last three months.

Immediate resistance is $250 which is June 2020 highs.

If bears fall below the three-month support trend line of March-June, and $230, odds are, the ETH price may crater to $200, a psychological level.

Meanwhile, a sharp break above $250 coupled with above-average trading volumes may spark a rally thrusting ETH price towards $280.

Disclaimer: This is not investment advice. Opinions expressed here are those of the author and not the view of the publication.

Comments

Leave a Reply