The Ethereum price is at a key transition point. While DeFi continues to draw capital and Gas fees drop, bull are training their eyes on $400,
- Ethereum price fluctuates from bullish to bearishDeFi remains successful
- Gas fees continue to fall
- SparkPool launches GasNow for predicting transaction fees
- Liquidation lies at $400
The Ethereum price remains stable but still not out of the woods. Just not yet. For one, prices are trending below the 20-day moving average, the middle BB.
However, there are fundamental events that could either prop or pop the bull momentum.
One is the positive development of Eth2. Promising to resolve the scalability, developers are head down, hard at work working towards making this milestone timely and successful.
Amid this development is the increase, week over week spike in the number of tokens under management in different DeFi protocols.
At the time of writing, there was over $9.75 billion worth of ETH as Total Locked Value (TVL).
However, interestingly—and quite relieving for non-DeFi dApps, is the falling Gas prices.
While users would usually correlate prices with Gas fees, in recent times, rising average transaction fees have had a counter-productive effect on prices.
Fall Gas fees
As of Sep 27, the average transaction fees in Ethereum–according to data streams from BitInfoCharts, stood at around $3–a near 80 percent drop from recent highs of $14.
This could be because of some “heavy” projects migrating to Layer-2 solutions like Optimistic Rollups (ORUs) whose Optimistic Ethereum test network was released last week.
Synthetix is the first DeFi protocol to experiment. Others like Aave and Uniswap plan to migrate in the coming weeks, heeding calls from Vitalik Buterin.
Optimistic Rollups (ORUs) is the most adopted because of its support for smart contracting.
Eventual adoption would not require projects to drastically adjust. Also, Ethereum won’t have to hard fork since only ORUs-aware projects can choose to migrate.
If not, there are other projects—and public chains–that are EVM compatible, helping scale the base layer and helping driving down transaction fees.
SparkPool launches a new Gas predicting tool
Meanwhile, SparkPool—one of the biggest Ethereum miners—has launched a new tool for predicting Gas prices.
And it will be different from existing systems. As its anonymous co-founder said:
Most existing solutions calculate gas fees based on historical gas fee data. However, SparkPool calculates gas fees based on our own mining pool’s pending transaction Mempool, where all the valid transactions are waiting to be confirmed by the Ethereum network.
Ethereum price prediction
Development in the daily chart suggests stability in the immediate term.
While prices trend below the middle BB—as aforementioned, there is a W-pattern visible. As long as prices trend above Sep 2020 lows, buyers have a chance.
Even so, there are hints of weakness. First, the double-bar reversal pattern of Sep 23 and 24 were with low trading volumes. From volume analysis, this is bearish now that prices are still trending within Sep 21 to 23 trade range.
Bulls will be fully in control once there is a sharp, high-volume close above $370—and for the risk-averse, $400.
Breaks below $320 could trigger a bear wave which may push ETH prices to $250 in a retest.