Ethereum price breaks below key support, suggesting a sustained downtrend
Recently, Ethereum developers decided to delay the difficulty bomb. As a corollary, it increasing inflation while most coins are trying to reduce this ratio.
The recent debate regarding Ethereum’s difficulty bomb has finally ended, and a consensus has been reached. According to the developers, the difficulty bomb will be delayed. PegaSys’s Tim Beiko confirmed that the developers agreed to push the difficult bomb an additional 4 million blocks.
It is estimated that the next difficulty bomb problem will appear in about 700 days, that is, in about two years. In other words, the bomb will explode again in 2021/2022. On the other hand, the PoS Beacon Chain will undergo significantly sooner, probably in the spring of 2020.
Meanwhile, inflation will increase by 2,000 ETH per day by the time the fork occurs. Currently, the number of ETH per day is about 11,600, which means it is expected to rebound to 13,600 ETH.
One thing to note is that the developers made all the decisions themselves without the participation of the Ethereum community.
Increasing the difficulty of mining will consume more energy, making it less profitable and harmful to the environment.
We thought we had months until it kicked in, but those numbers were wrong. The Ice Age is already being felt!
There is now a proposal for a single-EIP upgrade after Istanbul to push it back: EIP-2387 a.k.a. Mountain Glacier?
We’ll see on the call if & how it goes through!
— Tim Beiko | timbeiko.eth (@TimBeiko) November 29, 2019
Ethereum price is declining further
It seems that delaying the difficulty bomb and increasing inflation negatively impacted on Ethereum price. At the time of writing, the ETH price is trading down more than 1% and hovering around $ 145.
Ethereum price today. Source: Coinmarketcap
The Ethereum price has recently been broken below a significant support area after making a few attempts to rise above the resistance levels at $ 150 and $ 152. Whether it regains this area or not then it is also closely related to future price action.
Prices have fallen since November 18, when they have lost 20% of their value. This has become an excuse for detractors, such as anti-crypto Nouriel Roubini, who have stated that the price of Ethereum will eventually drop to its base value of $ 0.
Technical analyst Rekt Capital thinks that the Ethereum / BTC pair can help predict ETH / USD prices. According to him, ETH / USD will soon make a significant downward move.
Is ETHBTC giving an indication as to what may be in store for ETHUSD?
ETHBTC broke down from a crucial support & flipped it into new resistance
ETHUSD brokedown lately too – resistance flip next?
— Rekt Capital (@rektcapital) November 29, 2019
ETH technical analysis
ETH / BTC price broke below the support at 0.021BTC before confirming it was the resistance level.
Additionally, the price is following a descending support line that will bring the price to 0.019 BTC by the end of December. However, prices are still trading above the 100-day moving average (MA). Though it is likely to bounce, it seems that the price will make a lower low near the descending support line.
ETH / USD
When looking at the ETH / USD pair, the situation looks more gloomy. The price has dropped below a significant support area at the end of November and can confirm it is the next resistance level. This support area has been around for more than six months.
Price is also following a descending support line. However, the slope of this line and the current price position allow further decline until the price finds support. In addition, the 100 and 200-day moving averages have formed a bearish cross and the RSI is oversold.
Disclaimer: This is not trading advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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