Will EIP-1559 Thrust ETH Higher? (Weekly Forecast)
Ethereum rallied again this week, building off of last week’s explosive move up and forming another higher high on the weekly chart to print ETH’s highest price since mid-June. While it seems like the short-term downtrend from May is all but kaput, ETH will need to slice through resistance around $3K before we can start looking to new ATHs again.
(July 31, 2021 8:30 PM EST)
ETH is still above the 50 and 200 Week EMAs, meaning the long-term uptrend is well in-tact, and dips continue to be buying opportunities. There is still downside potential, however, as ETH remains tethered to BTC which is leading the recovery charge and back above $41K at the time of writing. A BTC pullback could drag ETH down, and a BTC rally could take some wind out of ETH’s sails as BTC dominance breaks out to the upside.
Overall, when you zoom out you can see clear as day that ETH is by all definitions in a bull market and long-term uptrend. Thus, it should be treated as such. With a deep mid-cycle correction now out of the way and improving fundamentals by the day, ETH should continue to recover and outperform BTC as it has by a nice margin YTD. If ETH breaks above $3,000, we could see a quick move to $4K, as there’s little resistance in between the two price levels. If ETH falls back below $2,000, look for support at the 50 Week EMA and 100% fib retracement around $1,700.
With EIP-1559 due to go live in early August, ETH is anticipated to become non-inflationary and possibly even deflationary, as well as capping gas fees, and a few other network upgrades. This could be a trigger for a rally as the crypto sees a supply shock similar to Bitcoin’s halvings. ETH 2.0 is coming along smoothly and the official switch to Proof of Stake is scheduled for late 2021/early 2022. This is extremely bullish for ETH’s price as if ETH2 can deliver what it’s been in development for years for, it will become a truly scalable general purpose blockchain network that would make many TradFi companies, platforms, and technologies undeniably obsolete.
ETH/BTC continues to consolidate around the 0.06 ETH/BTC level which has been support since the initial selloff in May. While it’s impressively held thus far, I wouldn’t be surprised to see ETH drop below to maybe 0.05 before bouncing and resuming the uptrend. Now that the short-term downtrend/selloff is all but over, BTC appears to be leading the pack in crypto, as it historically tends to do, which could suck a little capital out of ETH and into BTC for the time being. If that’s not the case, then 0.06 may well be a good re-accumulation zone before ETH resumes higher as well.
Support: $2,500, 0.06 ETH/BTC, then 0.05.
Originally published at https://www.publish0x.com.