The cryptocurrency market managed to slightly gain around 4% in the past week, but still as part of a consolidation. However, Ethereum prices managed to gain more than 15% in the past 7 days. Many crypto investors are asking why is Ethereum up while other cryptos still are in consolidation mode? Well, the answer to this is a fundamental one as there are important news in the Ethereum community.
What is Ethereum Blockchain?
Ethereum is the brainchild of Vitalik Buterin and the unofficial number 2 behind Bitcoin. Launched in 2013, this blockchain supports smart contracts, giving ETH the nickname “Programmable money“. Any person with a computer can launch his own smart contract on the platform, leading to a very dynamic and innovative environment. This blockchain has attracted a lot of attention back in 2021 by leading the booming DeFi scene, which is based on the network’s smart contracts.
On the other hand, there are many issues that dominate the crypto scene around Ethereum. Scalability and efficiency are two of the main reasons why Ethereum is suffering. The network is still using the Proof-of-Work mechanism, fees are still high and the process of mining is not energy efficient. However, this is all due to change once Ethereum gets its upcoming updates.
Why is Ethereum up?
It has been announced that the Ethereum consensus mechanism will finally be converted to proof-of-stake. In the past, it was announced that Ethereum 2.0 is coming and thus converting to Proof-of-Stake, but it has always remained open when it will happen. On July 15, it was announced that the merge will take place on September 19, 2022. Some people have been waiting for this innovation. According to Ethereum developers, this update will save about 99.95% in transaction fees. Furthermore, it is now much more environmentally friendly, since you can no longer mine ETH, such as Bitcoin (Proof-of-Work).
Ethereum Price Prediction – Will Ethereum reach $2,000 again?
If you look at the chart in figure 1 without any background knowledge of Ethereum 2.0, you can see that the ETH price has broken out of the sideways phase. Yesterday the price formed a doji. This doji indicates a trend reversal, so we expect the price to drop to the former resistance. This sits at around $1,280. After that, it could theoretically continue to climb towards $1,700. That’s where the next resistance is. However, since the news prompted a short-term pump, we do not expect the price to reach the next resistance. We could imagine a fake breakout here. This would mean that the price could drop again to the $1,000 support next, depending if the crypto market remains bearish or even consolidating.
One should wait and see whether the $1,280 support will hold or not. If this holds, we assume $1,700. If it breaks, the price is likely to fall to $1,000.
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