ETH price could move up to $ 420 if this critical level flips into support

ETH and the entire crypto market have been lacking momentum in recent days, with the aggregate market surging last week losing strength after Bitcoin reached the mid $ 11,000 zone.

Altcoin – which was recently able to break above $ 380 – has slipped below this level and may be in a slightly precarious position.

Despite its lackluster price action over the past few days, one analyst is expecting an imminent price surge.

ETH declined major support

At the time of writing, ETH is trading slightly up at its current price of $ 378. This is around the area where it was traded throughout the morning, with the bulls recently losing the support it had before. That’s $ 380.

The drop below $ 380 is technically significant, as this has long been a key level for cryptocurrencies.

Its next trend will likely depend on where Bitcoin is, as King Coin is currently trying to avoid the headwinds being created by today’s stock market crash.

Possibly up to $ 420

While sharing his thoughts on ETH’s current technical outlook, analyst “SmartContracter” explained that he is on track of the $ 420 rise in the near term.

According to him, ETH is currently trying to turn the $ 375 level into support, which could drive it higher.

“ETH: A nice SR flip is forming here, I think we can push higher to $ 420 coinciding with Fib 0.618 before I reassess.”

Bitcoin’s next destination over the next few days will provide some serious insights into where altcoins like ETH are going.

Vitalik Buterin urged users to move to Layer 2 scaling

Faced with recently inflated transaction fees, Ethereum’s founder and lead scientist, Vitalik Buterin, urged users of the second largest blockchain to move to scaling solutions “already available to us. many types of applications ”.

Buterin reiterated his enthusiasm for layer 2 scaling solutions, such as “rollups,” which basically means keeping transaction data on-chain while offloading computation. off the chain.

According to Ethereum’s roadmap to extend the base layer in its blockchain with a technique called sharding that doesn’t seem to be far away, Buterin said users are required to start supporting rollups:

“If you are listening to this and you are an exchange, a wallet application, a mining pool or a professional user – even just the average person – then you should know what rollups are and What do they do. Basically, what is your strategy for moving to them ”.

An explosion in a decentralized financial (DeFi) platform running on Ethereum has caused transaction costs to skyrocket in recent months (transaction fees have increased from 8 cents earlier this year to a high of around $ 14). in September). Meanwhile, pressure from other competing base layer protocols like Polkadot, Cosmos, and Blockstack is growing.

Buterin praised both “optimistic rollup” and ZK rollups, which use zero-knowledge-proof technology (proof-of-knowledge), adding that using these solutions on the existing Ethereum blockchain could increase throughput. transactions from about 15 transactions per second up from 1,000 to 4,000.

“In terms of our current position, for simple payments we are really there, just like you can do ETH transactions in rollups. The challenge is just getting people to get through it. EVM (Ethereum Virtual Machine) application smart contracts generally lag a bit behind, ”says Buterin.

Buterin did not specify when Ethereum will move to proof of stake (PoS), other than saying that phase 0, which involves an independent beacon chain as the basis of the proof, will happen “very soon”.

Test network operator Zinken recently said after a rehearsal in mid-October, a beacon chain would launch within about six weeks.

Looking ahead with PoS, Buterin says manufacturers can expect to reap a net profit as long as they’re online at least 50% -60% of the time. “Some other POS chain coming soon (are) saying that if you go offline for 12 hours, you will be knocked out, I think that’s completely crazy,” he said.

Buterin said the more coins staked, the more resources and complexity there are. That’s because someone staking 10,000 ETH will participate in more parts of the chain than someone staking 32 ETH, for example. I said:

“This is a natural consequence of how sharding works and it’s really a feature we really like. ETH 2.0 tries to be the friendliest to ordinary people.

Buterin is also very enthusiastic about Ethereum’s proposed fee market reform (EIP 1559), which will experiment with flexible block size limits. That, he says, will make the fee a bit less volatile and a bit more volatile block size.

Additionally, Buterin said, since fees are destroyed, or burned, (a really interesting change to the way things work today), “it’s very likely that the amount of ETH is burned from the fees. will exceed the number of shares issued to those who stake ”at current utilization.

Comparing Ethereum in this respect to Bitcoin’s decline in supply over time, Buterin added:

“Over the past three months, if this is the new standard, then after POS the supply of ETH is dwindling.”

“The crazy thing going on here is that if a fixed-supply currency is a good one, then a cryptocurrency with a decreasing supply will be a hypersonic one,” he said.

These long-term indicators show that Ethereum “has never been any healthier”

The Ethereum network has been under strain in recent months, with the trend of decentralized finance (DeFi) going on fueling a huge demand for the network as traders begin to use non-exchanges. centralized (DEX) and provides liquidity for different protocols.

Although network demand has slowed as the frenzy around DeFi has declined, gas prices are still significantly higher than before and often see intense fluctuations that can make network usage impractical.

Though recent network demand highlights the need for better scaling – which is expected by many to arrive later this year when ETH 2.0 starts rolling out. It shook some investors’ confidence in ETH’s long-term prospects.

However, one analyst notes that three main factors are showing the underlying strength of the cryptocurrency and its network at the moment.

Much of Ethereum’s supply has not been moved in more than a year

Despite all activity on the Ethereum blockchain, the majority of ETH tokens being held by investors have not moved in over a year.

This is an extremely positive sign that long-term investors are reluctant to sell their ETH anytime soon, as the majority of the coins held for over a year have not been sold even when the ETH price reached its highest level. was 490 dollars a few months ago.

ETH is extremely healthy

Other factors point to the fundamental strength of the Ethereum blockchain at the present time, with one analyst noting that it “has never been healthier”.

He specifically pointed out the total daily charge paid, the number of call contracts seen since September, as well as the number of active addresses daily.

Although the price of ETH has been stagnant lately and closely monitoring the price of Bitcoin, the combination of many of these fundamentals seems to suggest that its medium-term outlook remains bright.