Ethereum blockchain has reached a new height in market capitalization after realizing its dominance in the smart contract domains. On top of smart contracts, the ability to support the entire ecosystem dependent on Ethereum for running their multiple blockchain networks has provided ETH with a dominating market position.
With the launch of over 200,000 ERC – 20 tokens to date, over 40 of them occupy a position under the top 100 cryptocurrencies. Since the scaling to such height, people are now worried about the higher transaction cost affecting further scalability from the ETH network. Plans for moving towards a proof of stake are already under motion and should transition in the coming years.
London hard fork launched in August is expected to reduce the typical transaction cost using an extended feature of base fees. Users intending to speed up the process will be asked to pay priority fees for faster transactions. So far, after the London fork came into action, over USD 1 billion worth of ETH has been burned.
Ethereum Price Analysis
Ethereum has entered a downtrend ever since the substantial double-digit sell-off on September 07, 2021. The price action, for now, replicates to the fall after profit booking in May 2021. ETH has some strong support at 100 and 200 days moving average, which should ideally work as a buying level for now. Breaking these support levels will be disastrous as ETH could attempt to retest the $2200 swing support.
Ethereum is more robust on the longer duration charts, but the sentiment can be seen taking a heavy hit even in a one-day chart. A higher buying sentiment above 70 to trading below 40 shows the profit booking pressure active since September 07. After breaching its immediate support level of $3150, it has now turned to a resistance level for ETH.
A further selling has pushed ETH price towards 100 days moving average, which is a strong support level preventing continued fall in the value. Furthermore, both the 100 and 200 days moving average curve is moving upwards, indicating remaining positivity. Any downfall signal would ideally be reflected in the indicators by the end of November 2021.
Volumes have remained almost the same in the last one week, indicating equal action. Breaching $3200 on daily charts and holding the gains can help Ethereum resume its uptrend path as per ETH price prediction.
The price action on four-hour charts signifies the impending difficulty in creating a trending movement. For last week ETH is stuck within a small range causing sell-off at $3175 and initiating buying at $2750 levels. Combining this price action with the RSI action, it becomes clear that $2750 sits simultaneously with the 100 DMA and has become a supporting level.
Resistances have moved towards the level between $3650 to $3175 groups. Any movement above this level can be taken advantage of since the upside resistance will weaken once ETH heads above $3200 levels.