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Ethereum Price Preview: August 24 – August 30

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Welcome to the Ethereum Price Preview, an analysis of current and upcoming market events and how they might shape the price of ETH and the trajectory of the network.

As DeFi continues to build momentum, we take a look at the risks and fundamentals that may be impacting Ethereum price for the week ahead.

Ethereum Fees Drop 80% to July Levels

After reaching an all-time high, network fees have fallen 80% to a level last seen in mid-July.

The drop in fees makes it cheaper to perform operations on the network, allaying concerns that oracles and DeFi projects would be squeezed out due to high operating costs. It’s worth noting that fees are still historically high, with July 2020’s levels reaching the highest point since July 2018.

Source: Glassnode

High fees are a result of users bidding up the cost of settling their transaction on the Ethereum blockchain and is a strong fundamental indicator. However, the 80% pullback will likely give some breathing room to projects that may have come under pressure following the parabolic growth in fees since Q2 2020.

No Delay Anticipated to ETH 2 Launch

Last week’s Medalla testnet crash made headlines, casting doubts on the launch schedule for ETH 2. The bug targeted the Prysm client, one of the most popular ETH 2 clients, however the team followed up with a statement to say that the launch schedule would not be affected. Raul Jordan of Prysmatic Labs released a detailed blog post saying “It’s the greatest learning experience to prevent this from happening again, especially on mainnet.” 

He went on to state that “We believe this incident does not inherently affect the launch date. The Prysmatic Labs team recommends ETH2 launch schedule to continue with no delay. The incident from this weekend was a good stress test for many clients and actually checks off a few requirements on the launch checklist. While the launch date has not been set, we believe the expected launch target of 2 to 3 months from Medalla genesis is still an ideal timeline.”

In Demand: Exchange Moves $1 billion USDT from Tron to Ethereum

On August 20, a major crypto exchange expressed a vote of confidence in Ethereum by executing a billion-dollar USDT chain swap from Tron to Ethereum.

While the identity of the exchange is officially undisclosed, blockchain tracking outfit Whale Alert noted that Binance transferred $600 million in USDT to Tether’s treasury on the day of the chain swap.

With the DeFi explosion ongoing, demand for ETH and ERC20 tokens is likely cornering Tron’s share of the market. The fact that a major exchange is anticipating less demand for Tron and more for Ethereum in the near future may be a firm technical indicator for Ethereum’s price action over the coming weeks.

As Decrypto.co pointed out, Tether on the OMG Network second-layer scaling solution could reduce Ethereum congestion by up to 15%. The market clearly caught wind of this as well, and the OMG Network’s token (OMG) has almost tripled in value in the last week, rising from $2.79 on August 17 to $6.09 today. The price is up over 1000% since the Black Thursday crash in March and the market cap has risen by approximately 115%.

Further Adoption

In more general news, the US postal service published a patent on August 13 for a mail-in voting scheme based on blockchain technology. The patent comes during a time of mounting distrust and controversy regarding the efficacy of the USPS in collecting and delivering ballots for the upcoming presidential election.

There are flaws in the current system which have allowed people to vote multiple times, even impersonating deceased voters to cast a second vote. The patent is called “The Secure Voting System,” and USPS stated that “often a voter is not able to or does not desire to go to a polling place to cast a vote.

Describing the proposed blockchain system, the USPS stated “a voting system can use the security of blockchain and the mail to provide a reliable voting system. A registered voter receives a computer-readable code in the mail and confirms identity and confirms correct ballot information in an election. The system separates voter identification and votes to ensure vote anonymity, and stores votes on a distributed ledger in a blockchain.”

With mainstream media coverage including blockchain technology and DeFi continuing to make headlines with $6.8 billion in locked assets, Ethereum may be well positioned to consolidate and accumulate value following the drop below $400 seen last week.

Media Roundup

Chainlink’s Smart Contract Summit will take place on August 28 -29 and will be held online. The summit is billed as the largest DeFi conference of the year and is focused on discussion around DeFi and the future of smart contracts, as well as building connections between projects and facilitating collaboration.

Chainlink co-founder Sergey Nazarov will speak at the event alongside executives from Aave, Ampleforth, Synthetix, Offchain Labs, ConsenSys, and many more.

Finally, 0x announced that it’s hiring for several software engineering positions, stipulating that new hires can work either in San Francisco or remotely.

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Conor Maloney
Conor Maloney Analyst