The Ethereum price is range bound, two weeks after Eth2 activation.
At the time of writing (Dec 8), prices were trading below $600 and crucially, below last week’s highs despite resistance for lower lows.
While bulls may be in control and aggressive traders ramping up in lower timeframes, a comprehensive close above the current accumulation (or distribution) depends on when and how bulls/bears break below or above important liquidation and support levels.
For now, the Ethereum price is stable on the last day of trading also dropping slightly week-to-date.
Ethereum (ETH) Price Overview
Overly, the trend is bullish. However, how fast buyers drive prices back to $600 and $640 will depend on participation levels.
For now, traders are watching the price action at $640—Dec 1 highs, the middle BB—the 20-day moving average, and on the lower side, the zone between $490 and $500 for hints on the short term trajectory.
Break above $640 could fan more demand resulting in buyers driving prices to $700 and later $800 in the medium term.
On the flip side, losses—first below the middle BB, may provide a reason for dumping ETH with immediate targets at the support zone between $490 and $500.
However, triggers are on the fundamental fronts where news favors buyers.
Ethereum (ETH) Market Movers
Eth2 Phase 0 and staking is live.
A week later and over one million ETHs are locked up in the official deposit contract. It translates to over one percent of the total supply—though is inflationary and more coins keep being produced to fund developers.
1% of all ETH is now in the deposit contract!
Updated stats; the decentralization numbers are a bit worse than last time but only because they now properly treat Bitcoin Suisse with their multiple addresses as a single unit. Still doing far better than I expected! pic.twitter.com/B0ck5YGTUk
— vitalik.eth (@VitalikButerin) December 6, 2020
The more validators lock up their assets, the more decentralized and robust Ethereum is. For now, there are over 24k active validators, confirming transactions and securing the parallel Eth2 as developers keep track of performance.
While Ethereum could end up being more decentralized than Bitcoin. From a validator-versus-full node count perspective, the smart contracting platform may be more useful once Serenity is ready.
The combination of staking—mopping up free coins from circulation (bullish), and more utility, combines for a more bullish ETH in the medium to long term.
Perhaps—while not assuming causation, this is the reason why Grayscale Investment notes the emergence of new clients who are “Ethereum only” joining the fund. In an interview with Bloomberg, Michael Sonnenshein, the MD of Grayscale, said this points to the growing conviction of Ethereum as an asset class.
Ethereum Price Prediction
The Ethereum price remains range-bound in the daily chart. There are hints of weakness but the uptrend is firm as the middle BB provides support.
Barriers for upside stem from the failure of bulls to overcome the current consolidation. Of note, prices are ranging inside Nov 24 to Nov 26 trade range with dropping volumes.
From risk-analysis, this is bearish. Accordingly, every high may be an opportunity to unload. That is, unless there is a close above Nov 24 highs. Accompanying this should be high trading volumes exceeding those of Nov 26.
Therefore—although the prevailing sentiment is bullish, risk-averse traders should nonetheless wait for a clear break and close above trigger levels.
For buyers to be in control, a rally past Dec 1 will likely open doors for $660 and $940, respectively. These buy targets mark out the 161.8 and 261.8 percent Fibonacci extension levels of the July to September trade range.
Conversely, losses below the middle BB and $560—or Dec 5 lows, may trigger a sell-off. In this case, bear targets will be between $480 and $500 in a retest. It marks Aug to Sep 2020 highs.
Chart Courtesy of Trading View
Disclosure: Opinions expressed are those of the author. Do your research.
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