Ethereum Technical Analysis: 200-day SMA Currently Blocks Further Downward Plunge For ETH

Daily Ethereum ETH Price Analysis

Last Updated July 23rd 2021
3 Min Read
  • Ethereum price has flipped 20-day SMA from support to resistance.
  • ETH can have three more bearish sessions in the TD detector.
  • The Ethereum price is currently sandwiched between the 200-day SMA ($2,035) and the 20-day SMA ($2,120), with the former acting as support. Prior to this, ETH had jumped from $1,845 on June 26 to $2,315 on July 4. Ethereum has since gone down after charting bearish green-nine candlestick.

    Ethereum Price Sits On Top Of 200-day SMA

    The Ethereum price has crashed from $2,335 to $2,025 between July 7 and July 12. In the process, ETH has flipped the 20-day SMA from support to resistance. The TD sequential detector tells us that ETH could drop for three more sessions before flashing the bullish red-nine candlestick. The MACD is on the verge of shifting from bullish to bearish.

    Image: ETH/USD daily

    ETH/USD daily chart 071321

    Looking at IntoTheBlock’s IOMAP, the Ethereum price has critical support at the 200-day SMA ($2,035). Previously, at this level, over 122,000 addresses had purchased almost 1.1 million ETH tokens.

    ETH/USD volume chart 071321

    Is The ETH 2.0 Upgrade Overhyped?

    The new ETH 2.0 software updates scheduled to be implemented will not address the network’s long-term issues that have prevented it from reaching the heights that Buterin and his followers had envisioned, according to a Bitcoinist report.

    Ethereum currently uses a proof-of-work (PoW) mechanism that allows for only about 15 transactions per second and is largely regarded as unfeasible for establishing a large-scale decentralized finance (DeFi) ecosystem. As a result, Ethereum’s gas fees are high. Because there are so few transactions per second, the cost of processing faster becomes competitive. 

    Poor user experience (UX) design is another major issue that the Ethereum platform confronts. As a result, most users who might be interested in using decentralized finance applications or an NFT marketplace might avoid doing so because most user interfaces are not unintuitive. They also lack sufficient educational resources to teach users how to use the platform.

    The latest changes aim to be more environmentally friendly while also speeding up transaction processing. In addition to these enhancements, the blockchain programming language may evolve from the standard Ethereum Virtual Machine (EVM) to one that the developers who use C++ or Rust can employ, making coding directly in a browser easier. While the infrastructure enhancements may be useful in some ways, they fall short in others.

    For instance, Ethereum 2.0 has been under development for years, leaving many users wondering when the entire upgrade will be available. Although proof-of-stake will reduce mining costs and energy consumption, the network performance can only be raised if block timings and block sizes are reduced. Furthermore, sharding is only useful for apps that can operate independently and only need to sync once in a while. 

    However, because of DeFi’s intrinsic decentralized and open-source nature, sharding-style processing would require transactions to be routed through a relay chain, which would slow down the entire process. In addition, on the user experience front, Ethereum continues to lag to a large extent, which the Eth 2.0 update has yet to address. 

    Another issue is that transactions have long confirmation periods, which generally result in delays, asynchronous transaction submission, and confirmation messages, in addition to the persisting gas fee parameter difficulties. Frequently, a user will not receive confirmation immediately after completing a transaction, putting the user in the dark about whether or not the intended receiver received the transaction. 

    It’s unlikely that Eth 2.0 will make a substantial difference for anyone outside of the Ethereum community unless Ethereum can address some of the concerns at hand, added the report.

    Ethereum Price Is Expected To Reach These Levels

    If the Ethereum price doesn’t hold above the 200-day SMA, it could fall to the $1,845 support barrier.

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