The Ethereum price is thus far holding out impressively.
Indeed, $4k is proving to be a fair valuation for the coin. There are some destabilizing forces across the board. Analysts are split on whether the coin is overvalued or undervalued at spot rates.
The consensus, nevertheless, remains that Ethereum has an arduous task ahead.
For instance, the implementation of the controversial EIP-1559—a massive development for ETH–, and later Eth2 could shape ETH/USD price action in the medium term.
Ethereum Gas Issues
However, at present, the question is on Gas and how attempts to bring transaction fees to reasonable levels have proven futile.
Block Gas limit increment, some DeFi protocols shifting to Layer-2, and other projects that don’t see the sense of launching in Ethereum, have only seen temporary, positive changes in Gas fees.
In the last 24 hrs, Immutable X has enabled 4x more NFT trades than Ethereum L1.
These trades for our @GodsUnchained users were;
– free of gas,
– instantly confirmed,
and secured by Ethereum.
— Immutable (@Immutable) May 13, 2021
A few days after the block Gas limit increase to 15 million, Gas fees dropped to around $10 per transaction—still excessive levels—before spiraling to $65. Yes, $65 per transaction or, on average, over $150 to execute a simple swap in Uniswap or SushiSwap, for example.
I just paid $350 in Ethereum gas fees to sell my crypto at a $200 loss. This is the future
— John W. Rich Kid (Wendy’s Fry Cook) (@JohnWRichKid) May 12, 2021
The Vitalik and Elon Musk Intervention
This was due to the proliferation and the euphoria of meme coins—understandably after the success of DOGE.
It also validates Vitalik Buterin and Elon Musk’s actions when they rugged these projects this week.
— Larry Cermak (@lawmaster) May 12, 2021
Since then, Gas fees have dropped to $31.
A lot more needs to be done.
When Gas is low, ETH prices are firm, creating momentum for further gains. The drop in Gas in the last two days partially explains the resilience of ETH/USD.
ETH/USD Would Reach $10k
Aforementioned, even at a ballpark $4k, proponents expect another leg up towards $10k.
On Twitter, AltcoinHunterPL expects a cool-off to “recharge the battery.” Even for that, the uptrend still holds, and he aims for ETH/USD to reach $10k.
— AltcoinHunterPL (@AltcoinHuntPL) May 14, 2021
Because of this “cool-off,” Ethereum prices could, after all, therefore, correct to the $3k level. However, on a more cautious look, a comprehensive close above $4.2k with increasing trading volumes may be the impetus for another wave higher, lifting ETH/USD to over $5k.
— Zen (@ZenTraderEW) May 13, 2021
There might be some hints of weakness in the market to justify a correction. However, market makers could bid ETH/USD prices higher in the medium term.
Accordingly, one trader in Trading View, SignalProvider, thinks ETH/USD is ready for $4.4k. Short-term catalysts for this leg up will be firm fundamentals.
He says favorable technical candlestick arrangements and an alignment of technical indicators pointing to bulls.
In the weekly chart, ETH/USD prices are trending above crucial moving averages.
At the same time, MACD suggests strength and build-up in bullish momentum.
Except for the RSI momentum indicator, which the analyst says is over-bought, this won’t prevent ETH bulls from thrusting prices higher, potentially towards $5k.
Leaning on Caution: Support at $3.5k to $3.9k
And this may be the case because although ETH/USD price contracted this week, there is a revival in lower time frames.
In the 4HR chart, Fisher_FX notes that prices are bottoming up.
Therefore, provided ETH/USD prices trend above $3.5k and bulls push ETH above the falling wedge—in a bullish breakout pattern—the odds of buy trend continuation—like in early May 2021—remain high. In this case, odds of ETH prices closing above 2021 highs and racing to $5k would be on the cards.
On YouTube, Bitcoin Hypher thinks there is a lot of resistance for ETH/USD at spot levels. However, support levels stand at around $3.9k.
Disclaimer: Opinions expressed are not investment advice. Do your research.
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