Ethereum Price Analysis: ETH/USD May Have to Return to $80 Territory, Despite 2.0 Progression

  • ETH/USD price is back within consolidation mode after the selling of late January.
  • Ethereum network 2.0 upgrade is stabilize and progressing, according to the latest update.

ETH/USD: Recent Price Behavior

The Ethereum price has managed to stabilize over the past five sessions after the selling pressure that came into play at the back-end of January. The downside was triggered, as the bears managed to force a breakout from a narrowing daily range. There seems to be a repetitive pattern now – range-block formations, periods of sideways trading – ahead of an intense moves south. ETH/USD continues to flirt around the lowest levels seen since 20th December 2018, with vulnerabilities pointing to the downside.

A near-term area of demand can be observed preventing further falls south. This should be noted tracking from $106-$100 range, with buyers protecting that big psychological $100 mark for now. Given the current price behavior, dipping in and out of the mentioned demand, eyes are still on another fall. Similar price action was observed between 25 November – 4th December, which as a result saw the drop to December 2018 lows. The price had produced a low of around $83.00, and this acted as a bottom area, before big buying came back into action.

Ethereum 2.0 Pre-release Stable

Ethereum this week announced the commencing of its initial pre-release for ‘phase zero’ of the upcoming Ethereum 2.0 upgrade. This upgrade is also known as Serenity, which is anticipated to be a real game changer for the Ethereum network. As a result, it should see the network transform from the proof-of-work (PoW) consensus algorithm into proof-of-stake (PoS). It is also anticipated that the upgrade will be laying the foundations for Ethereum scalability and enhanced security, in addition to economic sustainability.

The official update was published via Ethereum’s Github earlier this week. Noting, “This marks the first release in a series of weekly releases through February 2019. Phase 0 in v0.1 is relatively feature complete and approaching stable.”

In terms of Serenity, this is part of the last within a series of four stages that have bene set out in the platform’s roadmap. Currently, the network is in the third stage – Metropolis, which consists of two system-wide hard forks, Byzantium and Constantinople. These will both be paving the way for the anticipated Ethereum 2.0. As a reminder, Constantinople was delayed to the back-end of Februaryp due to further issues experienced just some days ahead of the update.

Technical Review – ETH/USD

ETH/USD daily chart.

As earlier detailed, a critical area of demand is in proximity to the current price. A breach will likely open another strong wave of downside pressure. This potential further squeeze lower could really be the key to seeing strong demand return to the market. Should this move occur, it would result in another 20% being shaved off the current price.

Looking to the upside, given the continuous consolidation, various small resistance barriers are now eyed. It is also worth noting that price action has formed a descending wedge formation. This could be subject to an eventual breakout to the upside, if playing out to the textbook. The only question is, how far lower before that is seen.

Disclaimer: The author owns Bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.

Ken has over 8 years exposure to the financial markets. During a large part of his career, he worked as an analyst, covering a variety of asset classes; forex, fixed income, commodities, equities and cryptocurrencies. Ken has gone on to become a regular contributor across several large news and analysis outlets.