The launch of the Ethereum 2.0 network could be a piece of positivity for Ethereum price on the fundamental front
The fun-filled third quarter has begun for Ethereum price. The continuous increase in ETH and the spike is largely due to expectations of the launch of the Ethereum 2.0 testnet, Madella. This is the version that took place on August 4th. The mainnet launch is scheduled for October – November 2020.
Technicals and fundamentals behind Q3 Ethereum price action
From August 1 to August 12, the price trended sideways, consolidating above $ 378. After that, it soared to $ 431.5 and traded between $ 413 and $ 447 in 4. day, gradually reduced to 389 dollars. Ether has dropped significantly due to news of a malfunction in Madella that caused nearly all of its nodes to shut down. But the nodes were soon restored, and the testnet was saved.
At the end of August, Ether started a bullish trend, reaching $ 488 on September 1. But the profits didn’t last for another day. From September 2 to 5, Ether plummeted to $ 307. It tried to recover but was held back by the 0.618 Fibonacci level at $ 389 on September 12th. Ether then fell to the 0.5 Fibonacci level at $ 358.5 over the next few days and consolidated above that level.
ETH/USD 4-hour chart | Source: TradingView
The second attempt at breaking above 0.618 was undertaken by Ether on 17th September but was denied by the level, which subsequently saw the ETH/USD quote going down in five day’s downswing to $319 below the 0.382 Fibonacci level.
Now that the 0.5 Fibonacci level became resistant, it became a new upside target for Ethereum. The only positive the buyers managed to achieve, however, was getting to that level, which is at $358.5, with no further upside price action afterward. Thus Ether remained capped under the 0.5 Fibonacci level, which was a clear indication of a continued downtrend in the Ethereum market.
Surprisingly, the record cumulative Ethereum transaction fees that hit $350 million on 29th September from the beginning of the year and the highest ever median gas fee of $8.25 reached on 2nd September, did not lend Ethereum any tangible help in reversing the downtrend.
With the clearly visible Ethereum’s downtrend that came to replace the uptrend that was in place from 18th July through to 1st September, more downside price action is the likeliest continuation of Ether trading for maybe more than a month. If the buyers want to turn the ongoing downtrend into a flat, they first need to solidify their positions above the 0.382 Fibonacci level, preventing any further downswing.
The launch of the Ethereum 2.0 network could be a piece of positivity for Ethereum on the fundamental front because it is expected to double its current throughput, which is, on average, 15 transactions per second.
And that would be something Ethereum users need most these days due to the peak levels of congestion on Ethereum’s network, owing to the surge of the DeFi industry, which is massively exploiting Ethereum’s network. If Ethereum 2.0 goes online successfully and on schedule, it could positively reflect on Ethereum’s market positions.
You can see the Ethereum price here.
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