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Ethereum (ETH) Could Break Higher After Long Consolidation

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  • Ethereum price seems to be consolidating for quite some time above $180 against the US Dollar.
  • The price could start a strong upward move above $190 as long as it is above $180.
  • There is a short term ascending channel forming with support near $186 on the hourly chart of ETH/USD (data feed via Kraken).
  • Bitcoin is still capped by the $8,880 and $8,960 resistance levels.

Ethereum price is trading in a broad range versus the US Dollar and bitcoin. ETH price remains well bid above the $178 support and it could soon make an upward move.

Ethereum Price Analysis

In the past few days, Ethereum consolidated in a broad range above the $180 support against the US Dollar. ETH bears made a few attempts to push the price below the $180 and $178 support levels, but they failed.

Similarly, there was no upside break above the $188 and $190 resistance. Recently, the price revisited the $182 support area and started a fresh increase. It broke the $185 resistance and the 100 hourly simple moving average.

Moreover, there was a spike above the $188 resistance. However, Ethereum failed to surpass the $190 resistance area and it is currently correcting recent gains. It is now trading below the 23.6% Fib

retracement level of the upward move from the $182 low to $190 swing high.

At the moment, the price is approaching the $186 level and the 100 hourly simple moving average. Besides, there is a short term ascending channel forming with support near $186 on the hourly chart of ETH/USD.

More importantly, the 50% Fib retracement level of the upward move from the $182 low to $190 swing high is just below the channel support. Therefore, the price could find bids near $185 and continue higher.

On the upside, the $188 and $190 levels are important hurdles for the bulls. A successful close above the $190 level is needed for a bullish continuation.  The next key resistances are near $200 and $205.

Conversely, the price could break the channel support and decline below $185. In the mentioned case, the price is likely to revisit the range support area near the $182 level.

Ethereum Price

Ethereum Price

Looking at the chart, Ethereum price is stuck in a broad range above the $182 and $180 supports. If the bears continue to struggle near $182, the price is likely to start a strong upward move above $190 in the near term.

ETH Technical Indicators

Hourly MACD – The MACD for ETH/USD is slowly losing momentum in the bullish zone.

Hourly RSI – The RSI for ETH/USD is currently declining and approaching the 50 level.

Major Support Level – $182

Major Resistance Level – $190

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Ethereum

Ethereum’s Volatility Is at Multi-Year Lows; Is a Massive Movement Imminent?

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Ethereum and the aggregated crypto markets have been caught in a firm downtrend since early-November, and dwindling trading volume has resulted in ETH and other cryptocurrencies facing an ongoing period of sideways trading that has been frustrating for investors and traders alike.

This lack of volatility has especially impacted Ethereum, which is currently witnessing the lowest 60-day volatility levels seen since 2016, which may signal that a massive movement is imminent.

Ethereum Enters Tight Trading Range as Volume Dives

At the time of writing, Ethereum is trading down just under 1% at its current price of $144.55, which marks a slight decline from its daily highs of just over $146.

Over the past week, ETH has been ranging within the mid-$140 region, finding strong support at roughly $140 and strong resistance at $150.

This trading range has been growing tighter in recent times, as ETH has been stuck between roughly $142 and $145 for the past few days, and it is currently showing few signs of any major trend shift being imminent in the near-term.

This bout of sideways trading has come about concurrently with a major drop in Ethereum’s 60-day aggregated volatility, which is currently sitting at multi-year lows.

CoinMetrics, a blockchain research firm, spoke about this in a recent tweet, noting that th

is could mean that a big price movement is imminent.“With $ETH’s 60d volatility falling to levels not experienced since 2016 are we finally due for some price action? Or just more of the same,” they noted while pointing to the chart seen below.

It is highly probable that any near-term ETH movement will still remain somewhat dependent on Bitcoin, as BTC has been a strong guiding force over major altcoins in recent times.

Will Fundamental Strength Help Push ETH Higher?

Although it remains unclear as to whether or not Ethereum’s low volatility will result in a massive movement, growing fundamental strength could ultimately help propel the cryptocurrency higher.

Joseph Lubin, Ethereum’s co-founder and the founder of ConsenSys, spoke about Ethereum’s strength in a recent tweet, pointing to the massive amount of ETH currently locked DeFi initiatives as one reason why the blockchain is fundamentally strong.

“Over 20M total #Ethereum accounts were created in 2019. Over $650M USD is currently locked in #DeFi. Over 4.5M $ETH was issued this year from block rewards. The @ethereum machine just keeps chugging!” He explained.

While considering Ethereum’s low volatility and bullish fundamentals, it does appear that a bullish trend could be right around the corner.

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Ethereum (ETH) Bulls Keep Ceding Ground, Price Remains Highly Vulnerable

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Ethereum (ETH) bulls keep ceding ground. Now that the price has declined below the $150 mark, it seems unlikely that it will break past it anytime soon. The price keeps on losing ground printing lower highs and lower lows. The rising wedge on the 4H chart for ETH/USD has now been broken to the downside and the price has faced a rejection at the trend line resistance. Even if we see a near term move to the upside, Ethereum (ETH) will face rejection at the $147.65 level which is a very strong resistance. So, ETH/USD is expected to keep on declining further. If history repeats itself, we can expect it to decline again to the November, 2019 lows.

Despite any short-term bullishness, the price of Ethereum (ETH) faces some serious risks. There is a strong probability of a crash over the weekend that traders need to take into account. The price could easily decline down to the 61.8% which is not likely to hold. The area that has seen the most trading over the last 30 days and more is the $147-148 zone. That level will be extremely hard to breach now which is why we are more bearish than bullish on ETH/USD at the

moment both short-term and long term. The market is on the verge of another downtrend and any bullish move to the upside should be considered as an opportunity to sell or short-sell unless we have a game changing breakout past the $147.65 level.

Ethereum (ETH) is on the verge of a sharp decline against Bitcoin (BTC) as it has now faced multiple rejections at the 38.2% fib extension level. The VPVR indicator shows that the 38.2% also coincides with a frequent trading zone that has now become a strong resistance zone. Even if ETH/BTC ends up breaking higher, we are still likely to see it face rejection at the 200 EMA and then the 21,459 satoshi level.

The cryptocurrency market remains more vulnerable than ever. With the S&P 500 (SPX) keeping on making new all-time highs, the probability of some sort of a correction in the stock market has now increased. Even though the cryptocurrency market did not rally along with the stock market in the recent weeks, it is very likely to decline with the stock market if we see a correction towards the end of the year. We have seen sell-offs in the cryptocurrency market leading to Christmas and New Year which is why traders and investors might want to be very cautious being bullish on the market for now.

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Ethereum 2.0 Won’t Be Released for ‘Potentially Many Years’

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Ethereum is making progress, but the timeline for a full ETH 2.0 release is not coming any closer. According to a recent official blog post, we can expect “potentially many years before a full ‘Ethereum 2.0’ roll-out.”

With the recent Istanbul hard fork update, many in the Ethereum community were enthusiastic about Ethereum 2.0 coming soon. This enthusiasm, however, fails to grasp the complexity of the work the Ethereum developers are undertaking — and it’s going to take them a lot more time.

According to an overview of the most pressing problems confronting Ethereum developers, ETH 2.0 (called ‘Serenity’) is a long way away. The 1.x Files: a fast-syncposted on the official Ethereum blog, reads that the team is now focusing on more incremental upgrades to Ethereum 1.x. Research is being broken up into smaller updates to ensure that the original chain remains operable during this transitionary period.

The task now is to prolong the “life of the chain for at least another 3-5 years, before a more dramatic upgrade to Serenity (ETH 2.0) arrives,” the post reads.

What’s The Hold-Up?

The reasons for this ‘delay’ are multi-faceted and complex.

In the blog post, Griffin Ichiba Hotchkiss writes of a few core issues currently slowing down developers due to the enormity of the problems. These issues include:

  1. chain storage
  2. block size and transaction throughput
  3. state size and network performance

The team is still actively researching solutions to these problems.

Altogether, migrating the existing ETH 1.x to Serenity is made more difficult by the fact that the original chain has to stay aliveIf Ethereum started from scratch with Serenity, it would have been a simpler process. The need for incremental developments to ETH 1.x will slow down a

full roll-out of ETH 2.0 for the next few years.

In short, we can expect a full ETH 2.0 to come out in “many years” — in “at least another 3-5 years,” according to the Ethereum blog post.

Albeit vague, that’s the current timeline.

Ethereum 2.0 ‘Phase 0’ Still Tentatively Scheduled for Q1 2020

Ethereum has largely shied away from giving concrete timelines, but many media outlets have reported on Q1 2020 being the tentative date for ‘phase zero’ of Ethereum 2.0.

Danny Ryan, a researcher at the Ethereum Foundation, told reporters in mid-November that this arbitrary date was said during a public call with the team and the media picked up on it. It’s unclear whether the latest Ethereum blog post disputes the team’s plans to release phase zero of Ethereum 2.0 in Q1 2020.

It should be noted that phase zero is not anything close to a full launch, but is merely the first step in a long process. This phase will allow staking and will introduce ‘ETH2’ for the first time, but this asset cannot be withdrawn or transferred during this step. All participants who decide to stake during phase zero will see their ETH1 burned in exchange for ETH2 — but it will be effectively be frozen until the next step.

Sharding, along with transactions, will come in the next phase. Judging from the recent technical issues posted on the Ethereum blog, however, we can likely expect sharding to be implemented sometime in 2021.

As BeInCrypto previously reported, the transition to ETH 2.0 will inevitably involve two Ethereum chains and cryptocurrencies to co-exist for a time. ETH 1.0 and 2.0 will have different prices and will both be trading on exchanges until a full version of ETH 2.0 is rolled out. This period will likely prove to be a pivotal moment for the world’s leading smart contract platform, as it must prove that its upgrade is feasible to the market and industry at large.

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