Ether (ETH) prices regained $ 2,000 on Monday, raising expectations that the recent rally would serve as an indication of further uptrend given the bullish fundamental and technical outlook.
The world’s second largest cryptocurrency by market capitalization rose 4.96% to $ 2,083 before the opening bell in London. Its gains appeared as part of a general upward correction that began late Saturday. At this point, the bids for ETH / USD had fallen as low as $ 1,717.41.
The pair closed the session at $ 1,984.71 on Sunday, followed by further spike above $ 2,000 on Monday, a level traders see as support for further upward momentum in the Ethereum market.
“Ethereum is targeting $ 2,045 first,” noted Twitter-based independent market analyst Research 25/7, adding that the cryptocurrency is now surfing the “recovery wave”.
“After the slump, ETH is in a process of consolidation and seems ready for an upward breakthrough. With the only pivot in the way, the triple top is set as the next target price at USD 2,045. “
Market analyst Edward “Teddy” Cleps also highlighted a bullish scenario for Ether when he referred to its bespoke “secret EMA cloud”. The analyst regularly refers to the exponential moving average indicator to identify potential entry and exit levels in a trade.
Last week, ETH slipped under the bottom wave support of the EMA cloud. This week, the cryptocurrency took it back, prompting Cleps to predict a longer upward momentum.
$ ETH invades the cloud and $ 2000 again – life iz gud. pic.twitter.com/1d2h1ejuw0
– NFTeddy (@TeddyCleps) June 28, 2021
Ether prices also rose as they maintained their positive correlation with Bitcoin.
The bulls were encouraged by Bitcoin’s ability to maintain its bullish trend above a closely watched support level of $ 30,000. The flagship cryptocurrency climbed to an intraday high of $ 35,301 ahead of Monday’s London session. Meanwhile, its recent bullish move caused other correlated assets to rise in parallel, including ether.
“We see that the $ 30,000 level in Bitcoin was defended quite well last month with a series of tests at that level,” Vijay Ayyar, head of Asia Pacific at the Luno crypto exchange, told Bloomberg.
“We have seen strong downward pressure on defended prices so this looks pretty bullish right now.”
London hard fork
After the major protocol upgrade in July, the Ethereum market experienced more upward winds. The upgrade, dubbed the London hard fork, is designed to transform Ethereum from an energy-intensive proof-work network into a faster, “greener” proof-of-stake network.
The fork will introduce new Ethereum Improvement Protocols (EIP), which propose making its fee structure cheaper and its blockchain more scalable to handle a higher number of transactions. The two problems have proven to be bottlenecks for the introduction of Ethereum, even if it remains the most heavily used blockchain in the booming stablecoin and decentralized financial (DeFi) sector.
In general, the core proposal from London Hard Fork – dubbed EIP-1559 – will cap Ethereum’s gas fees while dampening the volatility of the network’s transaction fees.
The #ethereum London Hard Fork consists of 5 EIPs:
1.EIP-1559: Fee market change for $ ETH 1.0 Chain
2. EIP-3554: Difficulty bomb delay until December 2021
3. EIP-3529: Reduction of reimbursements
4.EIP-3541: Reject new contracts from the 0xEF byte
5.EIP-3198: BASEFEE opcode
– Young And Investing (@QuintenFrancois) June 27, 2021
EIP-1559 also brings what is known as the “scarcity” feature to the Ethereum ecosystem, which is currently the primary upside factor in Bitcoin (BTC) markets. The cryptocurrency is actively competing with the U.S. dollar to become the best inflation hedge thanks to its limited supply cap of 21 million units.
In contrast to Bitcoin, ether has no supply limit, which makes it less attractive as a store of value compared to unlimited printable fiat currencies. The circulating supply of ether at the time of publication was 116,471,411.37 ETH.
EIP-1559 proposes to burn some of the fee collected from Ethereum users, introducing a mechanism for the first time since its inception to place active ETH commitment tokens.
In the meantime, Ethereum’s transition from proof-of-work to PoS means replacing miners with validators. To become a validator on the Ethereum network, a user must lock at least 32 ETH in the network’s official smart contracts; this also reduces the active offer at ETH. Analysts therefore see this as a sign of another bull run, as the demand for ETH tokens increases when supply falls.
“Based on the planned London hard fork upgrade (EIP 1559) and the proposed migration to Ethereum 2.0, investors will support the coin even more,” says Domenic Carosa, founder and chairman of Banxa – a fiat-to-crypto gateway solution – said.
“This support is particularly strengthened as the base fee, one of the two components of the fee structure introduced by the London upgrade, is burned. This burning effect will limit the supply of ether and end the endless supply crises of Ethereum. “
Ethereum 2.0’s smart contract has attracted around 5.93 million ETH (worth around $ 11.9 billion) to date.
Ethereum price to $ 4,000-5,000
Carosa added that he expects Ether will have hit $ 4,000 to $ 5,000 by the end of December 2022, while sounding the alarm about the cryptocurrency’s short-term bias conflict.
We are neither a bull nor a bear, the executive told Cointelegraph, adding that more mature investors have started buying ether near its session lows with a long-term hold perspective. Still, the accumulation is not aggressive enough to continue the uptrend in the short term.
Ether fluctuated within a historically relevant range defined as $ 2,153 as intermediate resistance and $ 1,964 as intermediate support. At the same time, the cryptocurrency was looking at its 200-day simple moving average (200-day SMA; the saffron wave) as the price floor for a possible upside rebound.
With that, Ether is well on its way to $ 3,500 in the upcoming sessions, considering Wedge’s peak at around $ 1,500 as the point of the upside breakout. The maximum height of the pattern is just under $ 1,800.
The views and opinions expressed are those of the author only and do not necessarily reflect the views of Cointelegraph.com. Every step of investing and trading involves risk, so you should do your own research when making a decision.