Three Reasons That Might Support an Ethereum Upturn
By FVP Trade on The Capital
Ethereum’s (ETH) price is at long last beginning to show some signs of life as the cryptocurrency rebounds from its lows of late.
Its continuous rise has outpaced that seen by Bitcoin and most other cryptocurrencies, getting support from its capacity to break back over the lower boundary of its long-held trading range.
One predictable on-chain sign that has a good history of forecasting when the cryptocurrency forms mid-term highs and lows is now flashing, signaling that its lows of 220 USD could finally mark a long-term low for ETH.
The fast-approaching upturn that this sign is forecasting could be supported by three key reasons that play into the hands of the buyers.
Ethereum Shows Solid Price Movement As On-chain Data Indicates to Future Upturn.
Monday saw Ethereum’s price have a sharp, but brief decline that drove it to lows of 222 USD. At this price, it prompted the buyers to step up and reverse this downturn.
The ETH is currently trading well over these lows and is currently priced at 239 USD, signaling an intense 6% resurgence from the lows it was trading at just a day before.
This resurgence has surpassed that seen by Bitcoin, which is now trading up just shy of 3% at its current price of 9,300 USD.
ETH’s rise might be driven somewhat by its capacity to break the resistance that it had formed around 230 USD.
Buyers may now try to drive the coin up towards the upper limit of its trading range around 250 USD, however, the heavy resistance in this price area might be overwhelming.
One on-chain marker that supports Ethereum’s daily active address count against the bullish divergences seen by its price seems to forecast future upturns.
The research company responsible for making this marker, Satiment said that it is now signaling that a long-term ETH bottom is in.
“ETH has shown a major Daily Active Address vs. Price bullish divergence since 6/23. This (Santiment) model calculates when DAA is above its expected average 2-yr levels at current prices. Neon green has been a consistently reliable local bottom signal.”
These Three Reasons Could Support ETH Higher.
There are currently three bullish reasons working for Ethereum.
The first of these is the approaching release of ETH 2.0, which is predicted to increase the blockchain’s scalability while also decentralizing the system through a Proof-of-Stake agreement model.
Another reason that is being widely talked about by investors is how the DeFi sector could drive value to the cryptocurrency.
Ethereum Improvement Proposal (EIP) 1559, introduced in 2019, is basically the “final component to the crypto’s economic system,” according to ETH supporter David Hoffman, and is the last factor to ETH possible success.
It explains the user experience defects currently tormenting the blockchain’s gas management system and consumes a large amount of the ETH used to pay the transaction fees.
This adds a deflationary feature to Ethereum’s economic structure.
These three reasons might support an intense Ethereum upturn.
Ethereum, currently ranked 2nd by market cap, is up 5.19% over the past 24 hours. ETH has a market cap of 26.75 billion USD with a 24-hour volume of 9.02 billion USD.
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