Layer-2 Will Dominate Ethereum in 2021, ETH/USD Bulls Eye $1.7k
The Ethereum price shows signs of strength, much to the relief of holders and traders.
As of writing (Jan 14), the ETH/USD is firm above $1.1k, up and adding nine percent on the last day of trading and paring losses. The Ethereum price is mostly stable versus the USD but trails Bitcoin in the past day and week of trading.
Overly, traders are confident. From participation, volumes are still suppressed, sliding 13 percent on the last day of trading, revealing that the recent upswing is with light trading volumes and without requisite momentum needed for pumps above key sell-walls.
Ethereum (ETH) Price Overview
The Ethereum price continues to swing within a $350 zone with caps at $1k, a psychological round number, and $1.35k, 2021’s highs.
For buyers to be in charge, there ought to be sharp gains above $1.35k, even potentially above $1.4k—the coin’s all-time high, for trend continuation and rally to new all-time highs. Analysts project $2k in the medium term.
Depending on the rapidity and participation levels lifting prices above these sell walls, the ETH/USD price can easily tear, doubling in FOMO to above $2k as predicted.
On the other hand, if sellers of early this week flow back, causing the liquidation of over-leveraged longs in derivatives platforms, the ETH/USD price may sink below $1k in a FUD.
This, based on candlestick arrangement, could open up the Ethereum price back to $940 and, even worse, $600. These are critical support levels and important buy walls that defined the rally that saw the Ethereum price take off from $400 following Phase 1 Eth2 Beacon Chain’s activation.
As prices oscillate within Jan 2021’s trade range with relatively low trading volumes and repressed ranges, buyers stand a chance as long as ETH/USD prices are maintained above $1k.
Ethereum (ETH) Market Movers
Prices are balanced at spot rates.
Amidst censorship from social media and tech giants, Ethereum and IPFS systems like Filecoin can play a significant role:
The next generation platforms will be built on Ethereum and store data on the @Filecoin network. Services will be paid for in $ETH and $FIL and as demand increases, so will the value of these tokens. These are the fundamental building blocks of the decentralized web or web3.0
— Cameron Winklevoss (@cameron) January 13, 2021
Generally, the investor community is confident, expecting higher highs. Outside of institutional interest and the smooth development towards Eth2—inclusive of DeFi, is the encouraging development and implementation of Layer-2 solutions.
Vitalik Buterin endorses Optimistic Rollups. Synthetix, a trustless protocol enabling derivatives trading, is activating Castor. In the first phase of their eventual migration, they are enabling Layer-2 staking. This drastically reduces the cost of Gas and throughput.
Analysts are confident that Layer-2 incorporation and solutions looking to reduce the Gas fees will dominate in 2021.
Beyond us #Etheruem nerds, I don't believe the broader market has digested how absurdly impactful L2 will be for scaling Ethereum in 2021 & 2022.
For them, all 👀 still fixed on eth2.
They're seriously not gonna know what hit 'em.
— DCinvestor.eth (@iamDCinvestor) January 14, 2021
Ethereum Price Prediction
ETH/USD prices are still ranging inside Jan 2021’s high-low.
From the 4-HR chart, ETH prices bounced off from the 61.8 percent Fibonacci level anchored on Jan 2021’s trade range.
The reversal was with high trading volumes. This suggests that the climactic sell-off of Jan 11 potentially marked the end of the correction.
From price action, the first bull target for aggressive traders is $1,350—this year’s all-time high.
If the momentum is high, a break above $1,350 can see ETH/USD soar to $1,750. This is the 1.618 Fibonacci extension level based on Jan 2021’s high low.
Sharp losses below $940 may force ETH prices back to Dec 2020 highs of around $800.
Chart courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
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