Ethereum and the aggregated crypto market has been closely tracking Bitcoin’s price action over the past week, which has resulted in a choppy trading session for ETH that has ultimately led it to drop back towards $185 – which remains a critical support level for the cryptocurrency.
Although ETH is likely to find some support around $185 in the near-term, further weakness in the crypto market may lead it to plunge below this price level, and one analyst is noting that it may target $155 next.
Ethereum Revisits Key Support Level After Facing Swift Rejection at $200
At the time of writing, Ethereum is trading down nearly 4% at its current price of $188 and is currently trading down slightly from 24-hour highs of just below $200.
Over the past seven days, ETH has faced an influx of selling pressure each time it visited the $200 region, which signals that this price region is a key level of resistance that may prove to be insurmountable for the cryptocurrency in the near-term.
Josh Rager, a popular cryptocurrency analyst on Twitter, shared his thoughts on Ethereum’s price action in a recent tweet, explaining that its current price region may not be one of significant accumulation, despite what many analysts and investors had previously believed.
“$ETH Update: Some have called this a mega opportunity, I continue to watch for a confirmed reversal. ETH has been unable to break & hold above the 20MA for past six months. VPVR doesn’t suggest heavy accumulation yet at these levels. BB suggests incoming volatility – be careful,” Rager noted.
Will ETH Target $155 Next? One Analyst Thinks So…
Assuming that $185 does end up failing to be a strong level of support for Ethereum, Mitoshi Kaku, another popular crypto analyst on Twitter, explained that the next key support level currently exists around $155.
“A couple dates I have my eyes on for $ETH – Let’s see if that Kumo keeps offering a warm support! $155 is a key level,” he said while pointing to the below chart.
It is highly probable that ETH’s near-term price action will largely be dictated by that of Bitcoin, but a break below the key support levels that lies just below its current price could lead to a bout of capitulation that perpetuates its recent downtrend.
Ethereum (ETH/USD) forecast and analysis on February 26, 2020
Cryptocurrency Ethereum (ETH/USD) is trading at 263. Cryptocurrency quotes are trading below the moving average with a period of 55. This indicates a bullish trend on Ethereum. At the moment, cryptocurrency quotes are moving near the middle border of the Bollinger Bands indicator strip.
Ethereum (ETH/USD) forecast and analysis on February 26, 2020
As part of the Ethereum exchange rate forecast, a test of level 258 is expected. Where can we expect an attempt to continue the growth of ETH/USD and the further development of an upward trend. The purpose of this movement is the area near the level of 292. The conservative buying area Ethereum is located near the lower border of the Bollinger Bands indicator strip at 256.
Cancellation of the option to continue the growth of the Ethereum rate will be a breakdown of the lower border of the Bollinger Bands indicator stripes. As well as a moving average with a period of 55 and closing of quotations of the pair below the area of 248. This will indicate a change in the current trend in favor of the bearish for ETH/USD. In case of breakdown of the upper border of the Bollinger Bands indicator bands, we should expect an acceleration in the fall of cryptocurrency.
Ethereum (ETH/USD) forecast and analysis on February 26, 2020 implies a test level of 258. Further growth is expected to continue to the area above level 292. The conservative buying area is located near area 256. The breakdown of the growth option for cryptocurrency will be the breakdown of level 248. In this case, we should expect further fall.
Ethereum’s improving on-chain metrics offset market downturn
Of the top-ten digital currencies, Ethereum has managed to outperform the rest of the lot since the start of 2020. Valuation-wise, Ethereum had managed to hold a 100%+ hike at press time and its fundamental data statistics have relatively improved as well.
Following the performance of Ethereum over the first two weeks in February, the sentiment has now turned relatively bearish with major crypto-assets failing to register significant spikes in price. However, in spite of such conditions, Ethereum boasted of positive on-chain metrics over the last 30 days.
According to Coinmetrics’ State of the Network report, the number of active addresses on ETH blockchain had risen by about 41 percent in the month of February. The number of addresses improved from 236,095 to 320,273. A rise in the number of active addresses usually indicates that users are making use of the blockchain and more and more Ether transactions are taking place. In comparison to ETH, BTC active addresses only improved by 1 percent.
In terms of adjusted transfer value growth, Ethereum stomped its ground here as well, outperforming the likes of Bitcoin, Bitcoin Cash, and Litecoin. ETH’s transfer value growth was registered to be around 132 percent, whereas Bitcoin could only incur an 11 percent hike in the past 4 weeks.
Another one of the key metrics where Ethereum managed to outperform Bitcoin was in terms of transaction growth involving exchanges. The chart suggested that Ethreum has been involved in more transactions involving different exchanges, an observation that implied that the user base of different institutions may be increasing their accumulation of Ether.
Additionally, the Bletchley Ethereum Index witnessed a new record as well. The CMBI Ethereum Index recorded 9 weeks of positive returns, underlying ETH’s strength in the market, in spite of the market’s overwhelmingly bearish sentiments.
Looking over at the ETH Options volume chart, it can be identified that over 465 contracts set to expire on 27 March were predicting ETH to cross $360, whereas 400 contracts believed it will scale up to $800 by 25 September.
Such bullish sentiments should allow Ethereum’s price to stabilize up the charts, but with increasing volatility over the past week. That being said, a state of turbulence may trigger a change to the aforementioned statistics
DeFi attacks reignite centralization dilemma, debates on protocol reliability
With so much innovation going on in the space, DeFi has become a big rising star over the years. In a more recent milestone, DeFi apps on the Ethereum network hit an all-time high of $1.21 billion on 15 February. And while it has had its problems, given its short history, maybe hiccups are merely part and parcel of its development.
Source: DeFi Pulse | Total Value Locked [USD] in DeFiWhile a little turbulence in the still-nascent space is inevitable, the faith in DeFi is being tested after the decentralized protocol bZx was compromised recently in back-to-back “flash loan” attacks. This attack shook the DeFi realm. However, according to Arcane Research’s recent blog,“Most DeFi applications are based on Ethereum and therefore have a seed that provides administrator access for the dev team. Different protocols have approached this point of centralization differently”
Some address this point of centralization by adding an anonymization element to the smart contracts on the protocol, while others leverage an administrator intervention delay dynamic. The latter enables users to respond to changes to the protocol before the changes take effect.
However, the worrying part is the fact that there are a few protocols that are not as transparent. This puts a big question mark, not only on the reliability of the protocol’s dev team, but also on the operational security of the team, with the team forced to assure people that their administrator key will not be compromised by other malicious entities.
What this recent attack did was reignite the age-old centralization conundrum and the fact that nothing is ever 100% decentralized. Arcane Research also noted,
“Ultimately, its of upmost importance that users of DeFi applications are aware that the DeFi apps are not necessarily fully decentralized, and the implications this may entail.”
And while Ethereum takes a large chunk of the cake when it comes to decentralized finance [DeFi] applications, other blockchain networks such as EOS, Cosmos, and Polkadot. The centralized architecture of EOS has called some bad press lately, however, there are a number of financial projects that are being built on it.
Cardano, a project whose next phase Goguen will focus on smart contracts, also has a roadmap for DeFi on its network. However, at this point, Ethereum dominates the space and not everyone in the Cardano ecosystem is happy about it. In fact, on an episode of The Cardano Effect, Nicolás Arqueros, CTO of Emurgo as well as Cardano Foundation Council Member, had said,
“A lot of the startups just follow the users. So, right now most of them are building in Ethereum, but they do not like it at all. Whenever there is a new option that is better, they are ready to jump as long as it does not affect their users. Also, it’s not only important to focus on the startups, because they do not have that much money and they are trying to survive.”