- The Ethereum price is gearing up to advance further as the fundamentals behind it have yet to be realized.
- Technical aspects also support a long-term bullish outlook.
- During this time, the network experienced a spike in activity, as evidenced by the rise in gas prices.
It looks like Ethereum’s price is set for a significant rally as the highly anticipated ETH 2.0 upgrade is expected to launch in less than two weeks.
ETH 2.0 strengthens bullish outlook behind Ethereum price
Scalability has been one of the main drawbacks inhibiting the Ethereum network, hence the need to introduce features to address these challenges.
Serenity is the last step to increase the user-friendliness of the network and allow it to become “the computer of the world” as envisioned by its founder Vitalik Buterin. This protocol upgrade will incorporate proof of stake and other features that will improve the speed of the blockchain while maintaining its security.
Another important feature is sharding, which according to blockchain service provider Consensys will significantly increase the throughput that the Ethereum network can process.
“Fragment chains are a scalability mechanism in which the Ethereum blockchain is ‘split’ into 64 different chains, which allows for parallel transaction, storage and processing of information. At its most conservative estimate, it will allow 64 times the throughput of Ethereum 1.0, but it is designed to be able to process several hundred times more data than Ethereum 1.0.
Ethereum 2.0 by Hsiao-Wei Wang
As Ethereum moves away from proof of work and enters a new era of proof of stake, market participants will need to hold 32 ETH to collect staking rewards. This factor can trigger a spike in demand for the smart contract token, subsequently affecting its price action.
A new progression on the horizon
Ethereum’s weekly chart shows that its price action has developed a double bottom trend over the past couple of years. Following the recent breakout of the 78.6% Fibonacci retracement level, it looks like ETH may leap towards the 23.6% Fibonacci retracement level at $ 1,100.
But first, one would have to cut through three more resistance barriers represented by the 61.8%, 50% and 38.2% Fibonacci retracement levels. These barriers are respectively $ 600, $ 750 and $ 900.
ETH / USD weekly chart
Ethereum bulls don’t seem to show any signs of fatigue. If buying pressure continues to mount at the current rate, the smart contract token could reach new highs over the next year.
It is worth mentioning that the cryptocurrency community is increasingly worried about whether the Ethereum Foundation will be able to meet the threshold of 524,000 ETH required to launch ETH 2.0 on the mainnet. Failure to do so could have serious consequences for the price of Ethereum, as it could invalidate the bullish outlook.