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31 July 2021
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Ethereum

Ethereum Price Stable, ETH/USD Bulls Capped below $2.9k

The Ethereum price is stabilizing above $2.5k, building on encouraging gains posted over the weekend.

 

The odds of recovery towards critical resistance levels remain elevated at spot rates considering the flow rate of positive fundamentals.

Specifically, the direct correlation between Ethereum and Bitcoin helped revive activity for the second most valuable cryptocurrency.

The Migration to Layer-2 Forces Gas Lower

At the same time, shrinking Gas levels is alleviating pressure from the base layer, catalyzing activity in DeFi.

This, if anything, could be the precursor of the state of DeFi and NFTs once layer-2 solutions gain traction. Successful migration would make DeFi activities profitable, encouraging participation even from users who had moved to competing platforms due to unreasonably high Gas fees.

Eventually, Ethereum will resolve Gas troubles first by advocating heavy dApps to shift to layer-2 solutions.

In the course of the year, especially once Optimism is activated, intensive DeFi dApps like Uniswap will move their operations to an off-chain solution, further forcing Gas lower.

25% of ETH Locked in Smart Contracts

Because Ethereum’s ecosystem is more developed with a richer diversity and tested infrastructure, its position as a leader in DeFi would be cemented.

Already, statistics show that roughly 25 percent of all ETH in circulation is locked in smart contracts.

At the same time, there were almost over one million ETH coins locked in the BSC as BEP-20 tokens.

In one way or another, these coins are used in DeFi and invested in any of the potential blockchain companies crowdfunding via various launch pads.

Ethereum Price Analysis

The Ethereum price is steady as momentum tapers despite solid gains over the weekend.

At spot rates, the double-bar bullish reversal pattern of June 12 and 13 is valid. Meanwhile, the odds of ETH/USD blasting above the middle BB in a buy trend continuation pattern remain high.

If anything, aggressive traders can double down, buying the dips with targets at $2.9k in the immediate term.

On the other hand, risk-averse traders can wait for a close above $2.9 and breakout above June 2021 range before loading up.

In that case, their immediate target would be $4.3k—or May 2021 highs.

Leaning on caution, an unexpected slump below the minor support trend line and $2.1k invalidates the uptrend, opening up ETH/USD to bears.

Chart Courtesy of Trading View

Disclosure: Opinions Expressed Are Not Investment Advice. Do Your Research.

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