ETHUSD, Daily
- Last month’s ERC-20 token creation was 125% higher than February’s.
- The imminent proof-of-stake fusion might result in favorable consequences for Ether.
- Ethereum began a new downtrend as it rejected $3,280 and $3,300.
Ethereum attempted an upward correction above $3,220. Although the price of ETH increased above $3,250, the bears arrived at $3,300. At the time of writing, ETHUSD was trading at $3,121, a decline of 1.84%.
Eating up gas
Gas consumption on Ethereum climbed by 13% in March, indicating a higher demand for block space. According to certain market analysts, greater gasoline use contributed to ETH’s rise above $3,500. Demand was fueled in part by the increased issuance of ERC-20 tokens and the proliferation of layer 2 applications. Arbitrum and Optimism are two layer 2 protocols that run on top of the Ethereum network. Demand has surged due to the popularity of Ethereum Virtual Machines (EVM) – compatible blockchains such as the Avalanche Contract Chain (C-Chain), Fantom Opera, and Polygon.
ETH 2.0
The year 2022 is shaping up to be the most momentous in Ethereum’s history. Although the precise date is uncertain, Ethereum is gearing up to complete the long-awaited Merge of its proof-of-work and proof-of-stake chains, dubbed ETH 2.0. As a consequence, ETHUSD is currently trading at a premium to its mid-March lows, when the Ethereum network overcame the last major obstacle ahead of the much-anticipated software update known as “the Merge.” Since March 14th, Ethereum has gained roughly 30%. The Merge will result in the Ethereum blockchain transitioning from the energy-intensive Proof-of-Work (PoW) model to the much more environmentally friendly/efficient Proof-of-Stake (PoS) model, which experts think will occur by the end of Q2 2022.
Goldman offering ETH
Institutions are paying close attention ahead of Ethereum’s transition to Proof-of-Stake, generally considered as the most significant technical advancement in the blockchain since 2015. In response to rising client interest in Ethereum, Goldman Sachs’ global head of crypto trading, Andrei Kazantsev, revealed on Tuesday that the bank would now provide over-the-counter (OTC) options trading in the cryptocurrency.
What to look for?
Whilst the present environment of high inflation has been beneficial for major cryptocurrency markets in recent months, the background of increasing interest rates and a more hawkish sounding Federal Reserve continues to be a source of negative risk and uncertainty for the cryptocurrency markets. Although ETH does not have an explicit cap on its total supply like BTC, many people still see it as a useful inflation hedge.
ETHUSD technical forecast: Bears in control?
The ETHUSD price is traveling below $3,200. The 4-hour chart shows a bearish crossover of the 50 and 100 SMAs. The price is below 20 SMA but above 200 SMA, indicating a bullish trend in the longer run. The next key resistance level is at $3,250. If the price goes above this level, it could further move towards the $3,300 mark. On the flip side, the next support is at $3,100. If the price declines below this level, it could further drift towards the $3,000 level.
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Adnan Rehman
Market Analyst
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