Ethereum Consolidates Ahead Of Next Big Move
In the ebb and flow of the Ethereum (cryptocurrencies: ETH) market, it looks like the tide is rising once again. Prices for Ether, the native token of the Ethereum platform are up 27% in the last 2 to 3 weeks and up 100% from earlier this year and look like they could easily gain high double-digit to low triple digits over the next 12 months. If you are wondering why it is the ongoing progression and transformation to the Ethereum 2.0 network. The development team has launched several EIPs or Ethereum Improvement Protocols over the past few months, and with great success, making great strides toward the main goal. That goal is a true proof-of-stake network that does not rely on resource-sucking hashing power, a goal that should be reached within the next few years.
The First Hard Fork Of The Beacon Chain Is At Hand
The beacon chain is the foundation of the ETH 2.0 Network. It is the base chain from which future transactions will be validated and runs alongside the current Ethereum. Altair is the name of the first hard fork of the Beacon Chain and is expected to go live in about 15 days. The hard fork will help improve the future function of the Beacon Chain as well as progress it along towards the final goal. Among the changes are “Sync Committees” intended to help light clients function faster on mobile devices and reforms to the incentive accounting protocols including a couple of bug fixes. The key takeaway is that participation in the Beacon Chain is higher than ever and continues to grow. At last count, there were over 70650 epochs or 240,700 validators with an average of 33 ETH staked on the network. The total number of Ethereum staked is running close to 8 million or roughly $28.25 billion with ETH trading at $3,575.
Ethereum Is Regaining Its Dominance
The dominance of the cryptocurrency market has and likely will be controlled by Bitcoin for a very long time. That said, we see Ethereum taking market share from both Bitcoin and the broad cryptocurrency market and that is evident in the data. While Bitcoin remains the leading cryptocurrency by market cap, Its dominance has been running near 45% and down from the highs near 70%. Ethereum, on the other hand, has seen its dominance more than double from the sub 9% levels posted at the low following the 2018 crash to the 18% that it is running right now. Notably, an influx of tokens outside of the traditional top 10 has also been taking market share from Bitcoin. That group includes many of the defi tokens which we view as the next level in cryptocurrency.
The Miners Still Love Ethereum
Hashing rate is an odd topic to be discussing when talking about proof of stake networks but Ethereum is still a proof of work network so it's very relevant. Ethereum hashing rate has seen some ups and downs over the years but ultimately has only risen and has risen to a new all-time high just this week. What this tells us is that miners are trying to take advantage of the rapidly improving network and possibly in a way that will result in more new stakes on the Beacon Chain. While the Beacon Chain will make traditional mining obsolete, each stake on the chain will be used as a liquidity pool to validate transactions across the network and earn fees along the way.
The Technical Outlook: Ethereum Is Poised To Retest The All-Time High
Price action in Ethereum has been bullish over the past two weeks and looks like a retest of the all-time high is coming very soon. A move above $3,675 would be bullish and confirm the uptrend. In that scenario, the recent consolidation becomes a continuation pattern that suggests $800 of upside should be expected. This puts the target at just over $4,200 and a new all-time high. Assuming the stock can break out to a new all-time high and hold the level, we see an influx of new money driving this cryptocurrency well above the $5,000 level and possibly as high as $5,500.
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