Since my analysis last week, Ethereum has declined below its 200-day EMA and has remained above the 20-day EMA.
After a weekend dip across the cryptocurrency markets, the market has started to slowly recover. As we can see below, this bear party is far from over. Ethereum fell about 5% since last week.
Price is currently sitting around $158, after a greater dip that took ETH below the 20-day EMA. It even touched its 50-day EMA three times, around $150, before rallying up again.
Daily trading volume is now higher than $10 billion, which is still quite bullish compared to yearly lows. Ethereum’s market cap stands at around $13 billion, making it the second-largest cryptocurrency in terms of market cap.
Currently, Ethereum is moving parallel to the market, and unless there is a sudden decline in volume, I don’t see any sudden changes.
As I mentioned in my analysis last week, there were signs of an incoming dip closer to the 50-day EMA. However, ETH is still above the 20-day and 50-day EMAs – a clear bullish signal.
Hopefully volume will continue to rise. Otherwise, prepare yourselves for a trip back down to the $150-$155 price levels.
In theory, the development of Ethereum 2.0 should increase Ether’s reservation demand as the network’s overall utility improves. The transition to Proof-of-Stake should greatly help in this regard because it gives network participants more incentive to hold Ether. This will solve the ICO cash-out problem that plagued the platform last year. As the quality of token offerings improve, we are also less likely to see cash-grab ICOs and whitepaper projects that were rampant in 2017.
Regarding “economic abstraction”, a term that describes gas payments in non-ETH assets that could render ETH eventually useless, Vitalik Buterin says several fixes are being considered. The community is considering the ‘modified fee market’ and ‘storage maintenance fees’ proposals, which would basically make gas payments in ETH mandatory.
From a purely price perspective, Ethereum remains a highly attractive investment relative to its peak. An investment in ETH is essentially an investment in the future of its development community and the likelihood that it will dominate smart contract and dApp development. Presently, Ethereum has the largest community of infrastructure developers contributing to the protocol and its repositories.
If Ethereum continues to develop sidechain solutions around its main network, there could be limitless ways to scale.
We should also remember Ethereum is currently the backbone of the DeFi movement (decentralised finance), which could help with future adoption.
Ethereum was launched by Vitalik Buterin on 30th July 2015. He was a researcher and programmer working on Bitcoin Magazine and he initially wrote a whitepaper in 2013 describing Ethereum. Buterin had proposed that Bitcoin needed a scripting language. He decided to develop a new platform with a more general scripting language when he couldn’t get buy in to his proposal.
More Ethereum news and information
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As with any investment, it pays to do some homework before you part with your money. The prices of cryptocurrencies are volatile and go up and down quickly. This page is not recommending a particular currency or whether you should invest or not.