The Ethereum price is trading at $454 at the time of writing, on Nov 16, 2020, stable against the USD and trailing BTC as coin trackers show.
After major moves in the first week of November, there was a sharp decline in volatility even though trading volumes were within average. Notably, the Ethereum price oscillated in a tight trade range with caps at $433—weekly support, and $478—weekly resistance.
At spot rates (on Nov 16, 2020), the ETH price is trending inside last week’s trade range. However, for the buy trend continuation of Q2 and 3 2020, bulls must build momentum for a break and close above August 2020 highs of around $484.
Ethereum Price: Market Movers
A possible foundation for higher highs lies in the state of fundamentals.
Ethereum is transiting from a Proof-of-Work to a Proof-of-Stake consensus algorithm. The migration will take place in phases, spread over several years culminating in Serenity. By then, Ethereum hopes to resolve scalability concerns and eliminate miners blamed for high transaction fees.
At the moment, the Ethereum community is preparing for Phase 0 and staking. The Beacon Chain mainnet will activate only when 524,288 ETH has been locked up by 16,384 validators by Nov 24.
I don't think people fully comprehend the upside of ETH2.0 staking
At the min ETH staked, you get roughly 36%~ APY.
At 1M ETH 18%~ APY.
At 2.5M 10.2% APY.
Given slow uptake, early birds are going to make massive profit pic.twitter.com/zXWA5QzZ6q
— Adam Cochran (@AdamScochran) November 9, 2020
From the official Eth2 deposit contract, 94,880 ETH is locked up representing 18 percent of the progress. With eight days to go, there are concerns that Phase 0 may not go live on Dec 1, 2020, as scheduled.
If the threshold is not met by Nov 24, the Beacon Chain mainnet activation will be postponed for another week until after there are enough validators to trigger the launch.
In Eth2 and staking, a large part of the network’s security will depend on the state of price. The higher they are, the more secure the platform. For this reason, if the Beacon Chain will go live on Dec 1, 2020, the probability of ETH prices rallying is high.
If the ETH/USD market is efficient and representative of both fundamental and technical events, price movement provides useful hints.
Ethereum Price: Analysis
From the weekly chart, the uptrend is clear. Even though there is a bearish divergence as trading volumes have been shrinking after the climactic selloff of mid-March, a close above $490 and $500 may spark further demand, attracting participation.
The 20-day moving average acts as flexible support.
Presently, the Ethereum price is trading within a bullish breakout pattern after gains of late July 2020. However, since prices are trending inside the week ending Sep 6 bear bar, sellers may force prices lower especially if fundamentals don’t pan out as expected.
From volume analysis, bulls must rewind losses from early September. Driving prices above its highs ($490) must be equally high trading volumes—exceeding 2.39 million from Coinbase data. In that case, the Ethereum price could rally, printing new 2020 highs.
If not, ETH prices may slide back below the middle BB towards $300 in a retest of June 2019 highs.
Chart courtesy of Trading View
Disclaimer: Views and opinions expressed are those of the author. This is not investment advice. Do your research.
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