Ethereum Price Prediction: ETH Faces One Major Obstacle On Its Way Back To $2,000

Last Updated July 23rd 2021
4 Min Read

Daily Ethereum ETH Technical Analysis
  • Ethereum bulls are in control for four straight days.
  • The IOMAP shows a lack of strong resistance barriers upfront.

Between February 20 and February 28, the Ethereum price dropped from $1,950 to $1,415, losing a little over $500. Since then, the buyers gained momentum and managed to bump ETH to $1,845. Over the last four days, the buyers took complete control of the market.

Ethereum Price Stays Under Bullish Control For Four Days

ETH buyers have been in control for four straight days. During this upward surge, the Ethereum price has managed to flip the 20-day SMA from resistance to support. Plus, ETH was successful in flipping the parabolic SAR from negative to positive, which shows that the buyers are in control of the market.

eth/usd daily chart 030921

Image: ETH/USD daily

IntoTheBlock’s IOMAP shows us that the pack of strong resistance levels upfront. There is a moderate resistance barrier at $1,900, wherein 96,400 addresses had purchased almost 680,000 ETH tokens.

eth/usd volume chart 030921

Image: IntoTheBlock

Number Of Daily Addresses On The Decline

Active Addresses Chart

As per IntoTheBlock, the number of new addresses entering Ethereum is on the decline. This shows that potential investors are probably waiting for Ethereum price to reach certain levels before they re-enter the market.

Ethereum EIP-1559 To Launch In July Hard Fork

Ethereum Improvement Proposal (EIP) 1559 is set to be included in its codebase in July this year. EIP 1559 aims to improve the overall Ethereum user experience when it comes to transaction fees.

Currently, a user sends a gas fee to a miner to include their transaction in a block. However, EIP-1559 proposes users send that gas fee to the network itself. Called basefee, this is a sort of a “burn” and users would have an option of paying a tip to the miners. The burnt fee would be set algorithmically, seemingly improving the UX.

Eric Conner originally submitted the proposal and its summary provides an overall outlook of what it strives to achieve:

A transaction pricing mechanism that includes fixed-per-block network fee that is burned and dynamically expands/contracts block sizes to deal with transient congestion. 

In a recent All Core Developers call, it was decided that the upcoming London hard fork will include EIP-1559. Despite the potential improvements that EIP-1559 could bring, some of the largest Ethereum mining pools are divided on their stance.

F2Pool, the third-largest ETH mining pool, supported the initiative, claiming that it would ultimately have a positive impact. In a post, F2Pool said that “the general community along with core developers are siding with evolving Ethereum to include EIP-1559. It is important to side with the users and core contributors.”

However, the largest mining pool, Sparkpool, publicly asserted that it “opposes EIP-1559.”

Meitu Invests $22 Million in Ethereum

Meitu, a Chinese photo-editing app, recently disclosed that it holds over $40 million worth of Bitcoin and Ether. The company said:

The Group has purchased 15,000 units of Ether and 379.1214267 units of Bitcoin (“BTC”), both cryptocurrencies, in open market transactions at an aggregate consideration of approximately US$22.1 million and US$17.9 million respectively, on March 5, 2021. 

The firm mentioned that the purchases were made following a “cryptocurrency investment plan” under which Meitu could make a net purchase of up to $100 million worth of various cryptocurrencies. The money for the investment comes solely from its existing cash reserves and “other remaining proceeds” from its 2016-initial public offering (IPO), Meitu added. 

According to official figures, Meitu made annual profits of over $107 million last year, mainly from selling advertisement spots on its app. The company officials said that they expect cryptocurrencies to increase in value in the coming times. They further explained their plan to branch away from holding cash as an asset: 

The Board believes cryptocurrencies have ample room for appreciation in value and by allocating part of its treasury in cryptocurrencies can also serve as a diversification to holding cash

The company noted that cash was subject to depreciation due to aggressive increases in money supply by central banks globally. This was a reference to the incessant money printing done by central governments in the past year following the COVID-19 pandemic.

Ethereum Price Is Expected To Reach These Levels

Ethereum price should touch the $1,900 resistance level. If the buyers manage to overcome this, ETH will reach $2,000.