Ethereum price can hit $14K if the March 2020 chart fractal holds

July 29, 2021 Coin Telegraph

$Ethereum price can hit K if the March 2020 chart fractal holds$

One trader spotted the fractal, which employs three classic technical indicators to predict an upside trend for Ethereum.

Ethereum's native asset Ether (ETH) faces prospects of closing above $14,000 sometime in 2021 based on its current trend's striking similarity with the one from last year.

Ether price fractal

First spotted by user TradingShot, the Ethereum fractal involves three technical indicators: a 50-day simple moving average (50-day SMA), a Fibonacci channel, and a relative strength index (RSI).

Ether closed above its 50-day SMA in July 2021, the first time since the May 2021 bearish correction. As TradingShot noted, breaking above the said moving average wave historically predicts bull runs. For instance, a run-up above the 50-day SMA in April 2020 took the ETH/USD exchange rate from around $170 to over $500 in September 2020 — in only 137 days.

*Ethereum bullish fractal by TradingShot. Source: TradingView.com*

The period of extreme upside gains also witnessed Ether's daily RSI shooting higher from 60 (neutral) to over 90 (overbought). Meanwhile, as the cryptocurrency rallied, its price moves found interim support and resistance levels inside a Fibonacci channel.

New all-time high anticipated

TradingShot recounted multiple instances based on the April-September 2020 fractal, each showing Ether closing above its 50-day SMA and rallying higher inside the Fibonacci channel while its RSI wobbled between neutral and overbought levels. The same is happening in July 2021.

"Once [the 50-day SMA] breaks, it takes ETH either 132, 137 or 70 days to reach its next top on the Fibonacci scale," the analysts stressed. "As you see, tops are progressive one level higher each time—first 1.0, then 1.5, and the most recent in May on 2.0 Fib)."

Approximately, the 1.0 level on the next leg upward could have ETH/USD test $4,000. Meanwhile, an extended uptrend could have the pair reach 1.5 and 2.0 Fibonacci levels, which coincides with $6,000 and $9,000, respectively.

But TradingShot noted that on each rally after closing above the 50-day SMA, Ether's upside target progresses one level higher on the Fibonacci scale. Therefore, the cryptocurrency's next price target may be at the 2.5 Fib level, which is above $14,000. The analyst added:

"Technically, we may assume that the next Top will be at 2.5 or higher but certainly that appears to be a very high level from the current prices especially if it technically "needs" to be achieved in 137 days (or even worse 70 days) as the model suggests."

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Ethereum eyes rally to $3K, with 39% ETH price rebound triggering a classic bullish pattern

July 26, 2021 Coin Telegraph

Ethereum eyes rally to K, with 39% ETH price rebound triggering a classic bullish pattern

Altcoin Analysis

A falling wedge setup, as well as a rumor of Amazon preparing to accept cryptos, also boosts Ether’s upside appeal.

The price of Ether (ETH) jumped to a three-week high on Monday, triggered by similar gains in the Bitcoin (BTC) market that appeared in the wake of rumors about Amazon’s foray into the cryptocurrency sector.

A job posting from the retail giant showed that it is seeking an executive to build its “digital currency and blockchain strategy.” Meanwhile, global media reports have been speculating, based on inside sources that Amazon would start accepting Bitcoin as payments. As a result, the BTC/USD exchange rate surged to its six-week high after the news.

Ether, whose 30-day correlation with Bitcoin stands at 88%, surged likewise on Amazon’s crypto integration rumor. On Monday, the ETH/USD exchange rate soared to an intraday high of $2,390, reaching its highest level since July 8. The pair was up more than 6.7% as of 12:20 GMT.

*Ether bottomed out twice in a row near $1,700 in recent sessions. Source: TradingView*

However, measuring from its previous bottom of $1,720 on Tuesday, the net upside rebound came out to be 38.94%. The retracement looked strikingly similar to the bullish price action between June 22 and July 7, wherein ETH/USD rebounded by more than 40% after bottoming out at $1,700.

That said, Ether bottomed out twice near the $1,700 range before rebounding higher by 38%–40%. Analyst Jonny Moe spotted that mirrored retracements move and ruled them out as a double bottom pattern.

The bullish setup

In detail, double bottoms are bullish trend reversal patterns, consisting of two troughs around the same level hanging by a neckline resistance. As it plays out, the price eventually flips the neckline resistance as support and rallies higher by as much as the maximum pattern’s height.

Ether fits the description. It has formed two consecutive bottom levels at around $1,700. Meanwhile, its neckline resistance is near $2,390. Therefore, the maximum pattern’s height is $690.

*Ether's double bottom setup envisions price at or around $3,000. Source: TradingView*

Should the ETH/USD rate break above the $2,390 neckline resistance, accompanied by a spike in volume, the pair will be expected to extend its upside move by approximately $690. That would roughly take it toward $3,000 (with $2,948 serving as a psychological bullish target based on historical price action).

Confluence

Another technical pattern in play outdoes the double bottom setup’s upside target by predicting Ether prices at near $3,250.

Dubbed as a falling wedge, the pattern develops when the price trades lower inside a range that begins wide but contracts during the downtrend. It eventually prompts the price to break bullish while setting up its profit target at a level situated typically above the wedge height (if measured from the breakout point).

*Ethereum's falling wedge setup. Source: TradingView*

So, it appears, the ETH/USD exchange rate is undergoing a bullish breakout confirmed by a high-volumed close above the wedge resistance trendline. The profit-taking target for the current setup is $1,208 above the breakout level, which puts the price en route to $3,257.

16% Ethereum price rebound activates a classic bullish pattern — $2.5K next?

July 22, 2021 Coin Telegraph

16% Ethereum price rebound activates a classic bullish pattern — .5K next?

Bitcoin

The cryptocurrency market recovered on Thursday after renewed endorsements from Elon Musk at the 'B' Word Conference Wednesday.

Ethereum's native crypto Ether (ETH) rebounded sharply on Thursday after Elon Musk disclosed for the first time that his private rocket firm SpaceX holds Bitcoin (BTC), and Tesla would probably resuming the bitcoin payment option for its electric cars.

The BTC/USD exchange rate was below $30,000 but bounced by more than 5% after the big reveal, touching an intraday high of $32,895. Ether, which tends to move in lockstep with the flagship cryptocurrency, surged likewise.

*Ether was holding onto its previous session's gains on Thursday. Source: TradingView.com*

It reclaimed $2,000 on Wednesday, rising by as much as 18.20% from its week-to-date low of $1,720.

Lukas Enzersdorfer-Konrad, chief product officer at financial services company Bitpanda, told Cointelegraph in an email statement that Ethereum would continue tailing Bitcoin in the coming sessions.

"As soon as the “big brother” finds its support level," he added, "Ethereum will most likely follow suit."

Classic pattern sets $2.5K target for Ethereum

The latest bounce in the Ethereum market also originated from a support level that had earlier capped Ether's downside attempts.

Independent market analyst, known by the pseudonym Rekt Capital, flashed a so-called "orange area" on a weekly ETH/USD chart, illustrating three bearish wicks and their ability to shied the pair from falling lower.

"ETH has rallied +16% since rebounding from the orange area," the analyst explained, coupling the price floor with a support trendline that apprehensively constituted a Falling Wedge.

In detail, Falling Wedges are bullish reversal patterns that start wide at the top but start contracting as the prices move lower, forming a sequence of lower highs and lower lows. A bullish confirmation comes when the price breaks above the Wedge's upper trendline with a spike in volumes.

In doing so, bulls place their upside profit target as up as the maximum wedge height.

Ether prices almost check all the boxes when it comes to trading inside a Falling Wedge pattern. Rekt Capital highlighted the same in a chart he published Thursday.

*Ether falling wedge setup highlighted by Rekt Capital. Source: TradingView.com*

"As long as ETH holds the bottom of the structure as support until the end of the week, [it] will confirm a return to the structure after briefly losing it earlier this week," added Rekt Capital.

The maximum distance between the Wedge's upper and lower trendline is roughly $850. Therefore, according to the classic technical setup, a breakout above the upper trendline could send the prices to at least $2,500.

Nonetheless, the prices still risk falling sharply below $2,000 based on a short-term technical setup, as shown in the chart below.

*ETH falling wedge setup on its daily chart. Source: TradingView.com*

The daily Ethereum chart shows price could fluctuate between $1,850-2,080 before the potential bullish breakout, noted Rekt Capital.

Kirkpatrick and Dalquist's book titled "Technical Analysis" notes that falling wedges have a failure rate of just 8% to 11%. Moreover, the possibility of a bearish breakout has a higher failure rate of 15% to 24%.

Decoupling ahead? Bitcoin and Ethereum may finally snap their 36-month correlation

July 22, 2021 Coin Telegraph

Bitcoin

Bitcoin and Ethereum have been majorly trading in sync since 2018, increasing risk exposure of crypto-only investment portfolios.

Anish Saxena, a New Delhi-based automobile dealer, made “incredible” profits by investing in cryptocurrencies in 2020, just as his business took a hit from the coronavirus pandemic-induced lockdown.

“I had known about Bitcoin and Ethereum and dozens of other assets for years,” the 33-year old businessman said. “But I only got to invest in them after the lockdown pushed me and my family members out of work. And it helped us survive — big time.”

Saxena revealed that he had allocated about 80% of his investment portfolio to Bitcoin (BTC) and Ether (ETH), with the rest of his capital distributed across Polygon, Dogecoin (DOGE) and Chainlink’s LINK. His crypto-only investment netted him great profits, the numbers of which Saxena declined to reveal.

However, he did notice how he almost got half of his unrealized profits wiped by deciding not to liquidate ahead of the May 2021 crash.

“I was liquidating cryptocurrencies based on my household demand for cash,” Saxena said. “While I am still in profits, seeing my profits decline by more than 50% has prompted me to get a huge portion of my investments back into cash.”

Correlation risks

Retail traders like Saxena have come under pressure due to over-reliance on the two most predominant cryptocurrencies: Bitcoin and Ether.

While different in terms of economics and use cases, both digital assets tend to move in the same direction. In recent history, their losses and profits appeared well-synced, illustrating that their holders might see their investments grow rapidly during bull trends but, at the same time, risk losing a lot when the uptrend exhausts and reverses to the bearish side.

“If it is a pure crypto portfolio, then, of course, having two cryptos which are highly correlated with one another adds risk to the portfolio,” said Simon Peters, a crypto analyst at multi-asset brokerage company eToro.

“While the portfolio could see exceptional performance one month with the two cryptos making gains in tandem, you could also see huge drawdowns in a bad month as the cryptos move lower together.”

*The realized correlation between Bitcoin and Ether has seldom dropped below 50% in the previous three years. Source: Skew*

On the other hand, Liam Bussell, head of corporate communications at fiat-to-crypto gateway provider Banxa, called Bitcoin and Ether liquidity backstops for crypto traders.

In his comments to Cointelegraph, the executive said that traders utilize their initial gains in the top two cryptocurrency markets to invest in mid and lower-cap digital assets, citing rallies in Dogecoin and across nonfungible token projects. He noted:

“Once the market begins to slow, traders try to move back to liquid assets like BTC and ETH. This can offset declines for a short time but can’t maintain the market indefinitely. There are gains to be made in bear markets, but it is volatile coins, and the risk is high.”

*Bitcoin and Ether trends throughout their histories. Source: TradingView*

Additionally, Peters advised traders and investors to counterbalance their crypto investment risks by allocating a good portion of their capital in traditional financial instruments, including stocks, commodities, and fixed-income securities/funds.

“Historically, crypto has shown itself to be pretty uncorrelated to other asset classes and offers better risk-adjusted returns,” the analyst explained.

Decoupling ahead?

Peters, meanwhile, reminded that the Ethereum network’s transition from proof-of-work to proof-of-stake — known as Ethereum 2.0 — might limit its correlation with Bitcoin.

In detail, one of the principal features included in the upcoming Ethereum blockchain upgrade, called Ethereum Improvement Proposal 1559, is deflation and intends to burn a portion of transaction fees collected from users.

That could wipe out at least 1 million ETH tokens every year from the circulating supply, thus making the asset scarcer, according to crypto education publication Coinmonks.

Bitcoin exhibits a similar scarcity by reducing its newly issued supply rate by half every four years, a process called a halving. The cryptocurrency has a limited supply cap of 21 million tokens.

“It’s possible that a decoupling could occur between bitcoin and ether following the completion of the transition to 2.0, as the ‘tokenomics’ — how ETH works on the 2.0 blockchain — will be different to at present," said Peters, adding:

“Demand for ETH could vary depending on staking reward yields at that time, which in turn could drive the price of ETH higher or lower independently from other cryptos.”

As for Saxena, the novice trader said he would “hodl” on to a portion of his BTC and ETH.

“If business picks up again after a full economy reopening, I’m planning to invest consistently across Bitcoin, Ethereum, gold and mutual funds,” he noted.

No hard fork love for Ethereum as ETH price falls to a three-week low

July 20, 2021 Coin Telegraph

Bitcoin

Ether continues to trade lower under the shadow of Bitcoin in days leading up to its supply-crunching hard fork event.

Ether (ETH) prices slid in tandem on July 20, in tandem with Bitcoin's (BTC) drop below $30,000.

The ETH/USD exchange rate dropped 5.41% to an intraday low of $1,720 — or roughly $400 above its 2018 all-time high price, which should serve as an important psychological support level.

The pair's bid had climbed to as high as $1,994 on the Coinbase exchange on Sunday. Meanwhile, its price action looked strikingly similar to Bitcoin's, the flagship cryptocurrency that topped at $32,450 on Sunday but later corrected to as low as $29,507 during the Tuesday session.

*Bitcoin price trends continue to influence Ethereum's interim bias. Source: TradingView*

The plunge also followed the Ethereum network's co-founder Anthony Di Iorio's exit from the cryptocurrency industry, partially because of personal safety concerns. Di Iorio, who's likely a large Ether holder, hinted to Bloomberg in an exclusive interview that he would liquidate his entire crypto-related holdings without specifically mentioning the Ethereum blockchain's native token.

"[Crypto is] really a small percentage of what the world needs," he said, adding that he wants "to diversify to not being a crypto guy, but being a guy tackling complex problems."

Hard fork FOMO snubbed?

The latest bout of sell-off surfaced despite Ethereum's upcoming network upgrade. Dubbed as London hard fork, the major code update is another step from turning Ethereum into a speedier and scalable proof-of-stake network from an energy-intensive proof-of-work one.

But the most talked-about feature in the upcoming hard fork is deflation. The upgrade expects to burn a portion of the base fee paid to miners, thereby making reducing the supply of Ether. Crypto education platform CoinMonk noted in March that the London hard fork upgrade could ideally burn 1 million ETH in 365 days, an equivalent to almost one percent of the network.

Grayscale, a New York-based digital asset investment firm, also wrote in a report in February that deflationary dynamics would prove extremely bullish for Ether prices. ETH/USD surged by almost 180% to its record high of $4,385 after the report came out.

The latest downturn in Ethereum markets has flashed serious concerns about London hard fork's ability to withhold bullish bias. For instance, analysts at TradingView said in their timeline updates that inflationary pressures from U.S. markets might have boosted ETH/USD's downside sentiment.

*Ethereum has crashed by more than 60% from its record highs. Source: TradingView*

In detail, the U.S. Labor Department last week released June's Consumer Price Index (CPI) report. The latest data showed that inflation in the US rose 0.9% in June to 5.4%, the fastest just before the 2008 financial crisis. Bitcoin and Ether prices dropped after the report was released.

"Typically, cryptocurrency has been seen by digital asset investors as a hedge against inflation," TradingView analysts wrote, adding:

"However, in this case, the data itself matters less than what the Federal Reserve might do in response to that data. Traders began selling off cryptos like Ethereum and Bitcoin on fears that continuously rising inflation would prompt the Fed to take back its quantitative easing policies."

Bullish all the way

But not everyone is bearish. For instance, Konstantin Anissimov, executive director at CEX.IO exchange, anticipates Ether prices to reach $3,000 following the London hard fork.

"As things stand, the Federal Reserve has increased the size of its balance sheet from early 2020 to more than $8 trillion — a substantial rise," he said, adding that the reduced prices in the cryptocurrency markets are an opportunity for investors against beaten-down safe-havens in traditional markets.

"Market investors could accumulate the coins at a discount while trusting in their abilities to serve as the right hedge against the inherent inflation. Both coins with the renewed buy ups are likely to retest new price levels at $45,000, and $3,000 respectively."

Ethereum bounces but ETH price in danger of turning $2.3K into new resistance

July 14, 2021 Coin Telegraph

Ethereum bounces but ETH price in danger of turning .3K into new resistance

Bitcoin

The Federal Reserve chairman sidelined inflation concerns, which appears to have coincided with a relief bounce for Ethereum.

Ethereum's native token Ether (ETH) reclaimed $2,000 in the early New York trading hours Wednesday as crypto traders assessed the Federal Reserve Chairman Jerome Powell's prepared congressional testimony.

The ETH/USD exchange rate surged 7.19% to reach its intraday high of $2,019.90. Likewise, Bitcoin (BTC), whose 7-day positive correlation with Ether stands at 0.84 above zero, climbed, albeit by a modest 0.75%, hitting $32,379.

*Ether bounces of key support area Wednesday morning. Source: TradingView*

Powell gave his semi-annual monetary policy report to Congress on Wednesday, a day after the U.S. consumer price index report showed an increase of 0.9% between May and June, reaching 5.4% for the first time in three decades.

In prepared remarks ahead of his congressional testimony, Powell noted that inflation in the coming months would remain elevated. Nevertheless, the central bank chief added that rising consumer prices wouldn't deter them away from their ongoing bond-buying policy.

Powell said that the threshold of limiting its $120 billion monthly debt purchases—that have cushioned the U.S. economy throughout the coronavirus pandemic—is "still a way off." In saying so, he cited the U.S. labor markets, stating that its full recovery "still has a long way to go."

The statements appeared after a Bank of America survey of the global fund managers, who thought the global economy would keep on improving, dropped dramatically from 91% in March to 47% in July. The same poll named long Bitcoin—bet on rising BTC/USD rates—one of the most crowded trades alongside long ESG and long commodities.

*Economic expectations have peaked. Source: BoA*

But both Bitcoin and Ether dropped after Tuesday's CPI report and ahead of Powell's testimony release, thus drawing flak from critics for not behaving like a haven in the face of higher consumer prices. Part of the reasons were fears that the Fed would signal tapering its bond purchases sometime in 2020 and hike its benchmark lending rates only in January 2023.

Powell's assurance that their plans to taper is still away injected short-term optimism in the cryptocurrency market, benefiting Bitcoin and Ether alike.

Just saw the news. Inflation! Are any of us surprised? Government prints more dollars, so the other ones are worth less. Happy to be a #bitcoin hodler. The best inflation hedge.
— Tim Draper (@TimDraper) July 14, 2021

A technical bounce?

Ether's latest upside also appeared in the wake of a technical support level having a recent history of limiting ETH/USD's bearish bias.

*ETH stuck inside a symmetrical triangle range. Source: TradingView*

The said price floor serves as a rising trendline in a symmetrical triangle pattern. Ether has been fluctuating inside the said structure since mid-June, as shown in the chart above, which raises its probability to retest the triangle's resistance trendline (above the $2,300 level) in the coming sessions.

Nevertheless, Symmetric Triangles are continuation patterns that typically send the prices in the direction of their previous trend. Since Ether's current triangle formation appears in a downtrend, the path of ETH/USD's least resistance is to the downside.

*Symmetrical triangles breakout scenarios. Source: Scanz Trading Blog*

Therefore, Ether continues to face bearish risks on technical patterns. Nevertheless, the cryptocurrency has performed better than expectations despite a brutal crypto market sell off in the second quarter of 2021.

In its Q2 report released in July, data intelligence firm CoinMetrics noted that Ether finished the financial quarter 13.2% higher versus Bitcoin's -38.88%. It wrote:

"ETH benefited from a renewed surge of retail interest which was partially driven by the rapid rise of NFTs. Although NFT media interest peaked in March, it helped bring unprecedented mainstream attention to Ethereum which led to a flood of new users."

More upside prospects for Ether come from London hardfork. The upgrade would implement four improvement proposals on the Ethereum blockchain. One of the proposals, dubbed as EIP-1559, expects to make ETH a deflationary asset by burning a portion of the fee collected from Ethereum users.

Investment sentiment tracker Santiment appeared a bit cautious, however, warning traders about excessive speculation attached to the London hard fork event. An excerpt from its July 7 newsletter reads:

"One could say that 'This time it's different,' as ETH can be staked now, and with EIP1559 coming up, it'll be a gamechanger, etc. [...] It's all speculative at the moment, and no one will really know how the market will react to the implementation. It could be 'buy the rumor, sell the news.'

Ethereum price dragged down below $2K as US inflation hits highest level since 1991

July 13, 2021 Coin Telegraph

Ethereum price dragged down below K as US inflation hits highest level since 1991

Bitcoin

The second-largest cryptocurrency sells off in line with Bitcoin as traders assess the latest U.S. inflation data.

Ether (ETH) perhaps had the most bullish outlook entering the July session, with a key technical update dubbed EIP-1559, promising to make its native token ETH scarcer through the network's first-ever burning mechanism.

But so far into the month, the second-largest cryptocurrency by market cap has vastly tailed its top rival Bitcoin. The positive correlation was visible on July 13, following the New York opening bell, when Ether plunged below $2,000 to hit its two-week low in sync with Bitcoin, which slipped slipping below $32,500.

*ETH/USD vs. BTC/USD on Coinbase. Source: TradingView*

As it happened, the ETH/USD exchange rate reached its intraday low of $1,961.10 following a 3.43% drop. The pair's modestly bearish move locked step with Bitcoin, which apprehensively fell as traders assessed the latest U.S. inflation data.

The U.S. consumer price index ticked up 0.9% in June to hit 5.4% year-over-year, marking its highest level since 1991. Traders sold off Bitcoin and other cryptocurrencies on the news, pointing to fears that a continuously rising inflation rate would prompt the U.S. Federal Reserve to withdraw its quantitative easing policies.

Macro inflation vs. Ethereum deflation

In detail, the minutes of the Federal Open Market Committee's June meeting revealed officials in favor of at least two rate hikes by the end of 2023, providing the inflation rate runs too hot above their 2% target. The central bank has been maintaining interest rates below 0.25% since March 2020, which sapped investors' dollar demand and, in turn, had boosted demand for so-called safe-haven assets, including Bitcoin.

Ether, whose one-year correlation coefficient with Bitcoin stands at 0.64, according to Crypto Watch, surged all across 2020 and in the first quarter of 2021 on similar macroeconomic fundamentals.

The cryptocurrency, however, logged better gains than Bitcoin, owing to its role in a flurry of booming crypto sectors, including decentralized finance (DeFi), nonfungible tokens (NFT), and stablecoins.

*Bitcoin's one-year correlation with Ethereum. Source: Crypto Watch*

But the Ethereum network also suffered from technical setbacks in the form of a jammed bandwidth. An overloaded blockchain prompted miners—entities that process and add transactions to Ethereum's public ledger—to raise their fees. In some cases, users were forced to pay more gas fees than the amount they were transferring.

The problems appear to have come to a final resolution as Ethereum intends to switch its protocol from a miner-friendly but energy-intensive proof-of-work to a faster and cheaper proof-of-stake. In detail, the so-called London hard fork, which includes five improvement proposals, expects to counter those inefficiencies.

One of the improvement protocols, called EIP-1559, introduces a new fee structure to make Ether less inflationary.

It proposes to burn a portion of the fee collected in ETH, thus adding deflationary pressure on the cryptocurrency. In addition, the upgrade replaces miners with validators. In doing so, Ethereum requires each validator to lock at least 32 ETH to run its proof-of-stake network.

That also put a good portion of ETH supply out of circulation, making it as scarcer as Bitcoin.

For Konstantin Anissimov, executive director at CEX.IO, rising macro inflation provides more bullish opportunities to Ether as much as it does to Bitcoin. He adds that he anticipates the ETH/USD exchange rate to hit $3,000 on an anti-inflation narrative.

"As things stand, the Federal Reserve has increased the size of its balance sheet from early 2020 to over $8 trillion—a substantial rise," he explained, adding:

"The reduced pricing is an avenue for market investors to accumulate the coins at a discount while trusting in their abilities to serve as the right hedge against the inherent inflation."

And so it appears, Ether accumulation is happening at a rapid pace. According to CryptoQuant, a South Korea-based blockchain analytics firm, the total ETH reserves across all the crypto exchanges have dropped by more than half in the wake of its Q2/2021 price correction from $4,384-top to $1,700-low.

*ETH all exchange reserves are declining since September 2020. Source: CryptoQuant*

Correlation risks

Ether's correlation with Bitcoin remains a bottleneck as ETH eyes further highs. Nevertheless, Josh Arnold, a financial analyst associated with Seeking Alpha, highlighted that Ether and Bitcoin are sometimes negatively correlated. A 0.64 correlation efficiency is not perfect.

Arnold instead focused on Ether's price chart structure, noting that the cryptocurrency formed a descending triangle pattern upon topping out in mid-May 2021. Descending triangles are typically continuation patterns that lead the prices in the direction of their previous trends after a small period of consolidation.

*Descending triangle outlook based on Josh Arnold's trade setup. Source: TradingView*

Arnold noted that Ether bulls need to hold Triangle support to maintain their upside bias or they would risk losing the market to bears. He explained:

"A descending triangle break to the downside would see Ethereum plumb new 2021 lows and try to find support again, but at much lower levels."

But given Ether's resilience against bears, Arnold anticipated that the cryptocurrency might end up rising higher.

Ethereum price can gain 40% on Bitcoin, argues analyst as London fork nears

July 5, 2021 Coin Telegraph

Bitcoin

Technical setups, coupled with optimistic fundamentals, project Ethereum, would rise sharply against Bitcoin in the coming weeks.

Ether (ETH) could rise by almost 40% against Bitcoin in the coming trading sessions, according to one analyst.

So believes Michaël van de Poppe, an Amsterdam-based market analyst who predicts that the ETH/BTC exchange rate would climb from its current 0.05-0.06 sats range to as high as 0.07 sats soon.

The technical chartist based his bullish analogy on the pair's support level at 0.063 sats. The price floor was instrumental in maintaining ETH/BTC's bullish bias during the mid-May 2021's notorious crypto market crash. It also served as solid support during the pair's uptrend in the early May 2020's trading session.

"Ethereum is continuing the run against the Bitcoin pair," said Van de Poppe.

"A beautiful flip of the 0.063 regions and crawling upwards at this stage. As long as 0.063 holds, I'm expecting continuation to 0.075."

*Ethereum trade setup presented by Michaël van de Poppe. Source: TradingView.com*

What the Fork

The bullish analogy appeared right as ETH/BTC stretched its price rebound, from its June 27 low of 0.0552 sats, by 21.28%. It showed that more traders preferred to sell their Bitcoin holdings to seek opportunities in the Ethereum market in recent days. On a year-to-date timeframe, the second-largest cryptocurrency had already surged by more than 160% against Bitcoin.

The transition took cues from the euphoria surrounding Ethereum's consensus layer's transition from its previous, energy-intensive proof-of-work to a more scalable and cheaper proof-of-stake. The project launched the first phase, called Phase 0 or Beacon Chain, in December 2020. It introduced a so-called sharded network architecture to the Ethereum blockchain.

Sharding is a scaling technique that segments the Ethereum network into various groups (called shards). It then assigns nodes to each shard. These nodes have to monitor and validate their respective shards, thereby removing the need for each node to validate every transaction, which is the case in the current proof-of-work consensus.

The #ethereum London hard fork consists of 5 EIPs :
1.EIP-1559: Fee market change for $ETH 1.0 Chain
2.EIP-3554: Difficulty Bomb Delay to December 2021
3.EIP-3529: Reduction in Refunds
4.EIP-3541: Reject new contracts starting with the 0xEF byte
5.EIP-3198: BASEFEE opcode
— Young And Investing (@QuintenFrancois) June 27, 2021

The next phase that brings Ethereum closer to proof-of-stake is EIP-1559, also known as the London hard fork. The upgrade proposes to replace Ethereum's "first-price auction" fee model with a base network fee, modifiable per the network's demand. It hopes to solve the blockchain's higher gas and transaction fee problem. It also aims to make ETH a deflationary token by burning the base network fee.

Therefore...

Due to impending scarcity, analysts and traders see huge upside potential in the Ethereum market. The bullish formula is simple: Ether's drying supply in circulation against rising demand would make it more valuable than it is currently. And as a result, the cryptocurrency has been rising against Bitcoin so far into 2021.

Additionally, CryptoQuant, a South Korea-based crypto analytics firm, reported a rising holding behavior among Ether traders, taking cues from their declining ETH reserves across all the cryptocurrency exchanges.

*Ether prices typically move inversely to its reserves across cryptocurrency exchanges. Source: CryptoQuant*

The amount of ETH held in all exchanges' wallets reached a 2.5 year low on Monday.

The reduction of Ether on exchanges is clearly a positive indication that takes backing from investor’s trust in the future of the blockchain, Yuriy Mazur, head of data analysis department at CEX.IO Broker, explained.

The executive added that investors are taking alternative means to secure their ETH holdings during its price correction instead of dumping them outright for cash. He cited ETH-based investments into the decentralized finance sector as the prime example.

"Ethereum total value locked has soared in the past year. Staking in the forthcoming Ethereum 2.0 (Proof-of-Stake consensus model) has also absorbed the ethereum leaving trading platforms," Mazur said, adding that:

"The depletion of Ether on exchanges will contribute to a circulation scarcity that can have a positive impact on price."

Ethereum Classic price has nearly doubled days after Digital Currency Group’s $50M bet

June 30, 2021 Coin Telegraph

<div>Ethereum Classic price has nearly doubled days after Digital Currency Group's M bet</div>

Barry Silbert

The gains also appear amid an overall crypto market recovery following Bitcoin's sharp rebound from $30,000-support.

Ethereum Classic (ETC) reached its highest level in almost three weeks Wednesday, buoyed by Barry Silbert-backed Digital Currency Group's $50 million investment and by an overall cryptocurrency market recovery led by Bitcoin (BTC).

The 17th-largest cryptocurrency by market value traded as high as $63.19 — a nearly 98% rise from its June 22 low of $31.91. Meanwhile, the market value of all the Ethereum Classic tokens in circulation crossed $7.53 billion.

$ETC was part of the 1%.

+65% since Barry told us he was buying. https://t.co/gIa8FAeUQM
— Hsaka (@HsakaTrades) June 30, 2021

Digital Currency Group (DCG) revealed on June 21 that it has authorized the purchase of up to a total of $50M worth of shares of Grayscale Ethereum Classic Trust (OTCQX: ETCG). Grayscale is a New York-based investment firm that provides accredited investors access to digital currency products in the form of traditional securities.

*Grayscale ETC holdings . Source: Bybt.com*

On the day of the announcement, Ethereum Classic fell by 22.56%, much in line with the rest of the cryptocurrency market, which, in turn, was responding to China's increasing crackdown on the regional crypto sector, including a complete ban of mining-related activities.

But despite the heavy sell-off, the Bitcoin and altcoin markets bounced back in tandem. Traders particularly recognized buying opportunities in the Bitcoin market as BTC/USD slipped below $30,000—a psychological support level that lately kept the pair's downside bias from flourishing any deeper.

*Bitcoin has been trading between $30K and $40K since May 19. Source: TradingView.com*

Meanwhile, altcoins merely tailed the Bitcoin rebound owing to their high correlation with the top digital asset.

According to data provided by Crypto Watch, the 30-day correlation efficiency between Bitcoin and Ethereum's Ether (ETH) was 0.83 on Wednesday. A reading of 1 represents a perfect positive correlation between two assets.

Copycat hard fork

ETC's gains also appeared in days leading up to a major Ethereum Classic blockchain upgrade in July.

In detail, Ethereum Classic emerged from a controversial blockchain split that followed an approximately $150 million hack on the Ethereum-based DAO project in April 2016. The Vitalik Buterin team proposed to wipe out the attack from the Ethereum network history — a ledger rewrite that portrayed Ethereum as a centralized blockchain.

That led to the formation of two Ethereum camps: one that supported the reverting of chain and the other that didn't. In the end, the differences led to the formation of two competing yet independent Ethereum chains, one of them being the Ethereum Classic.

ETC's structure as a blockchain project varies from its competitors. Unlike Ethereum, ETC incorporates multiple development teams, including IOHK, ETC Cooperative, ETC Labs, etc. In general, most of these teams have focused on providing scaling solutions.

At the same time, their priority also remains to improve development tools (SDKs) and promoting cross-chain transactions so other projects can also build on Ethereum Classic.

On June 10, Steven Lohja, the lead developer at Mantis IOHK, announced to upgrade the Ethereum Classic blockchain with a hard fork called Magneto. The major update, as Lohja confessed, would be inclusive of the Ethereum Berlin upgrade features introduced earlier this year.

The Ethereum Classic's improvement proposals tend to improve the blockchain's network security while cutting down on its gas fees — it does so by storing addresses and keys in one place for users to access with a single transaction.

The ETC hard fork will go live in July, much in sync with Ethereum's London upgrade around the same period.

ETC technical setup

The latest ETC/USD rebound has come closer to invalidating a classic bearish setup that prevailed earlier.

*ETC price was approaching $16.62 following its strong breakdown from the previous triangle range. Source: TradingView.com*

The ETC/USD exchange rate bounced mid-way upon breaking its previously prevailing descending triangle setup. The pair found support right above its 200-day simple moving average (200-day SMA; the orange wave in the chart above) and moved higher to close above the triangle support around $51.77.

What's more, the rebound flipped ETC/USD's 20-day exponential moving average (20-day EMA; the green wave) from resistance to support. It now appears to do the same with the 50-day SMA (the blue wave) acting as resistance.

On the other hand, adjusting the triangle's support trendline lower makes it appear like a bullish falling wedge pattern.

*ETC/USD hints falling wedge breakout. Source: TradingView.com*

ETC/USD has broken bullish out of the pattern, much in line with its classic definition. A strong follow-through could have the pair rise by as much as the maximum Wedge height, i.e., the total maximum distance between its upper and lower trendline. It comes to be around $86.

That shifts the ETC/USD wedge profit target near $130.

Conversely, a potential reversal from 50-day SMA could have ETC/USD test the 20-day EMA as its interim support. Such a move would also risk invalidating the falling wedge structure.

Ethereum looks to retake $2K days before London hard fork — Big breakout ahead?

June 28, 2021 Coin Telegraph

Ethereum looks to retake K days before London hard fork — Big breakout ahead?

Altcoins

The world's second-largest cryptocurrency also surged in tandem with positively correlated Bitcoin, the flagship digital asset.

Ether (ETH) prices reclaimed $2,000 on Monday, increasing expectations that the latest rebound would served as a cue for further upside moves based on bullish fundamental and technical outlooks.

The world's second-largest cryptocurrency (by market cap) surged up to 4.96% to $2,083 ahead of the London opening bell. Its gains appeared as a part of an overall upside correction that started late Saturday. At that time, bids for ETH/USD had fallen to as low as $1,717.41.

On Sunday, the pair closed the session at $1,984.71, following it up another spike above $2,000 on Monday, a level that traders consider backstop for further bullish momentum in the Ethereum market.

"Ethereum targets $2,045 first," noted Twitter-based independent market analyst Research 25/7, adding that the cryptocurrency is now surfing on the "recovery wave."

"After the dip, ETH is in consolidation and looks ready for the break higher With the only pivot in the way, the triple top around $2,045 is set as the next price target.”

*ETH short-term outlook snapped around 0400 GMT. Source: TradingView.com, Research 24/7*

Market analyst Edward "Teddy" Cleps also highlighted a bullish scenario for Ether as he referred to his custom-made "secret EMA cloud." The analyst refers to the said exponential moving average indicator periodically to identify potential entry and exit levels in a trade.

Last week, ETH had slipped below the EMA cloud's lowermost wave support. This week, the cryptocurrency reclaimed it, prompting Cleps to predict an extended upside momentum.

$ETH penetrating the cloud and 2000$ again - life iz gud. pic.twitter.com/1d2h1ejuw0
— NFTeddy (@TeddyCleps) June 28, 2021

Bitcoin correlation

Ether prices pushed higher also as it maintained its positive correlation with Bitcoin.

Bulls took encouragement from Bitcoin's ability to sustain its upside bias above a closely-watched support level of $30,000. The flagship cryptocurrency climbed to an intraday high of $35,301 ahead of the London session Monday. Meanwhile, its latest move upside prompted other correlated assets to rise in tandem, including Ether.

Bitcoin correlation efficiency with altcoins. Source: Crypto Watch

“We’re seeing the $30,000 level on Bitcoin being defended quite well with a number of tests at that level over the past month,” Vijay Ayyar, head of Asia-Pacific at crypto exchange Luno Pte, told Bloomberg.

“We saw a lot of downward pressure on prices being defended, so this looks quite bullish at this point.”

London hard fork

More upside tailwinds in the Ethereum market came in the wake of its major protocol upgrade in July. Dubbed as London hard fork, the upgrade expects to transform Ethereum from an energy-intensive proof-work network to a speedier, “eco-friendly” proof-of-stake network.

The fork will introduce new Ethereum Improvement Protocols (EIP) that propose to make its fee structure cheaper and its blockchain more scalable to handle a higher number of transactions. The two issues have acted as bottlenecks for Ethereum's adoption even as it remains the highest-utilized blockchain across the booming stablecoin and decentralized finance (DeFi) sector.

In general, London hard fork's core proposal—dubbed as EIP 1559—will cap Ethereum's gas fees while moderating the volatility of the network's transaction fees.

The #ethereum London hard fork consists of 5 EIPs :
1.EIP-1559: Fee market change for $ETH 1.0 Chain
2.EIP-3554: Difficulty Bomb Delay to December 2021
3.EIP-3529: Reduction in Refunds
4.EIP-3541: Reject new contracts starting with the 0xEF byte
5.EIP-3198: BASEFEE opcode
— Young And Investing (@QuintenFrancois) June 27, 2021

EIP 1559 also brings in the so-called 'scarcity' feature to the Ethereum ecosystem, which is currently the primary bullish factor in the Bitcoin markets. The cryptocurrency actively competes with the U.S. dollar to become the best hedge against inflation, thanks to its limited supply cap of 21 million units.

Unlike Bitcoin, Ethereum does not have a supply limit, making it less appealing as a store-of-value asset against unlimitedly printable fiat currencies. Ethereum's circulating supply was 116,471,411.37 ETH at the press time.

Supply squeeze

EIP 1559 proposes to burn a portion of the fee collected from Ethereum users, thus introducing a mechanism to put active ETH tokens of supply for the first time since its launch.

Meanwhile, Ethereum's transition from PoW to PoS means replacing miners with validators. To become a validator on the Ethereum network, a user needs to lock at least 32 ETH in the network's official smart contracts; that also reduces ETH's active supply. Therefore, analysts see it as a sign of another bull run providing the demand for ETH tokens increases against a decreasing supply.

"Based on the scheduled London hardfork (EIP 1559) upgrade and the proposed migration to Ethereum 2.0, investors are bound to start backing the coin the more," Domenic Carosa, founder and chairman of Banxa, a fiat-to-crypto gateway solution, said.

"This backing will be particularly boosted as the base fee, one of the two components of the fee structure that will be ushered in by the London upgrade, will be burned. This burning effect will limit the supply of Ether and bring an end to the infinite supply crises of Ethereum."

The Ethereum 2.0 smart contract has attracted roughly 5.93 million ETH (worth around $11.9B) to this date.

Ethereum price to $4K-$5K

Carosa added that he expects Ether to reach $4,000-5,000 by the end of December 2022 while raising alarm about the cryptocurrency's short-term bias conflict.

We are neither bull nor bear, the executive told Cointelegraph, adding that more mature investors have started buying Ethereum near its sessional lows with a long-term holding perspective. Nevertheless, the accumulation is not aggressive enough to continue the upside run near-term.

*Ether consolidates inside the $1,964-2,153 range. Source: TradingView.com*

Ether was fluctuating inside a historically relevant range defined by $2,153 as interim resistance and $1,964 as interim support. At the same time, the cryptocurrency watched its 200-day simple moving average (200-day SMA; the saffron wave) as its price floor for a potential rebound move to the upside.

That puts Ethereum en rout to $3,500 in the coming sessions, considering Wedge's apex around $1,500 as the point of upside breakout. The pattern's maximum height is shy of $1,800.

ETHUSD