Ethereum Technical Analysis: ETH Consolidates Below $1,800

Last Updated July 23rd 2021
3 Min Read

Daily Ethereum ETH Price Analysis
  • The parabolic SAR and MACD in the daily chart is positive despite drop.
  • Fundstrat Lead Digital Strategist Makes Bullish Case For Ethereum Price.

Between March 6 to March 9, the Ethereum price went up from $1,535 to $1,875, gaining almost $350 in its overall valuation. However, the sellers took back control over the last two days, dropping ETH to $1,780. Let’s take a closer look with technical analysis.

Ethereum Price Drops Below The $1,825 Line

Over the last two days, the Ethereum price has dropped below the $1,825 resistance line. However, it’s interesting to note that despite this drop in price, there are two bullish signs:

  • The parabolic SAR has flipped from bearish to bullish.
  • The MACD shows sustained bullish momentum.

eth/usd daily chart 031121

Image: ETH/USD daily

On the downside, there are two healthy support levels at 20-day SMA ($1,650) and 50-day SMA ($1,600). The latter is particularly strong since 839,000 addresses had previously purchased 11 million ETH tokens.

eth/usd volume chart 031121

Image: IntoTheBlock

Fundstrat Lead Digital Strategist Makes Bullish Case For Ethereum Price

Fundstart’s David Grider wrote a tweetstorm talking about the potential of Ethereum. This is what he wrote”

“Ethereum has a market cap of $210B. ETH generated $1.75B of revenue YTD-21. That’s already 3x the $600M earned during FY-20. At this pace, ETH FY-21 revenue is set to grow 1,400% YoY and top $9B.”

To put these numbers in context, Grider compares Ethereum to Salesforce.

  • Salesforce (Cloud 1.0): $195B market cap with FY-21E revenue of $21B (25% YoY growth). 
  • Ethereum (Cloud 2.0): $210B market cap with FY-21E revenue of $9B (1,400% YoY growth). 

Grider also talked about Ethereum’s potential when compared to other PoS coins:

“Only 3% of ETH is currently being staked right now. Other PoS chains have 60% or more. As more ETH gets staked that’s going to reduce supply and create demand for earning staking rewards.”

He also noted that the upcoming EIP 1559 will boost the overall DeFi industry:

“After EIP 1559, that $9B of ETH demand for transaction fees will Instead get burnt - that’s bullish.”

Vitalik Buterin: Ethereum To Scale '100X’ Soon

Vitalik Buterin, the co-founder of Ethereum, said that the network will scale 100x and that the Optimism upgrade will release its layer-two solution in the coming weeks.

In a recent Tim Ferriss podcast, Buterin said that ETH 2.0’s devs are focused on working toward the chain merge with Ethereum. They are confident that layer-two solutions can support the network until sharding is developed, he added. 

Rollups are coming very soon. We’re fully confident that by the time that we need any more scaling of that, sharding will have already been ready for a long time by then.

Rollups are second-layer solutions that process and store transaction data on a designated sidechain, before bundling batches of transactions together onto Ethereum’s mainnet. The solutions are designed to eliminate Ethereum’s scaling woes, where fierce competition for bandwidth on the Ethereum mainnet has resulted in incredibly high gas fees.

While ETH 2.0 will use sharding to ensure scalability when fully rolled out, Buterin believes rollups will suffice for the midterm. He emphasized that rollups could improve Ethereum’s transactional throughput by 100 times. 

The thing to remember is that if you have rollups, but you do not have sharding, you still have 100X factor scaling, right? You still have the ability for the blockchain to go up to somewhere between 1,000 and 4,000 transactions a second, depending on how complex these transactions are.

Buterin predicted Optimism will launch their fully Ethereum Virtual Machine (EVM)-compatible rollups “in around a month or so.’ He highlighted the significant progress made by Arbitrum on their own EVM-compatible rollups. 

Optimism’s rollups are expected to be embraced by some of DeFi’s industry leaders, with commentators speculating that Uniswap’s coming V3 overhaul will utilize it. Aave and Synthetix are expected to be among the first projects to utilize the technology. 

Ethereum Price Is Expected To Reach These Levels

The Ethereum price is going to keep consolidating under the $1.800 level.

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