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Ethereum Price Preview: February 1 – February 7

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Our latest report covered the onset of a new stage of price discovery and adoption for ETH following an all-time high in price. ETH fundamentals continue to show strength as price hovers in the mid-$1,300 range. Let’s take a look at the factors and influencers playing a role in ETH price action.

Ethereum Fundamentals

Reddit announced a partnership with Ethereum Foundation last week, marking Reddit’s first ever blockchain partnership.

The Ethereum Foundation stated that through the partnership, it would be “increasing our commitment to blockchain, accelerating scaling and resources for the Ethereum ecosystem, and bringing the value and independence of blockchain technology to millions of redditors.” The foundation is currently hiring backend engineers to help with the partnership.

With over 430 million users per month, Reddit has a wide reach and an ever-growing number of potential investors at its disposal. This was demonstrated in earnest last week with the near-bankruptcy of the Melvin Capital hedge fund when Redditors from the r/WallStreetBets community implemented a short squeeze on GameStop stock, causing over $5 billion in institutional liquidations.

Ethereum is approaching the milestone of 1 billion transactions made on the network, with 994.7 million transactions currently listed on Etherscan.

ETH is currently trading above the $1,300 range, eyeing a new all-time high at $1,500 after hitting $1,473 last week. ETH has seen volatile trading, with some traders outlining a hard correction all the way back to $1,200.

However, the #2 cryptocurrency appears to have entered a period of consolidation for the time being, with strong support at $1,300. The next psychological level lies at $1,500, with the possibility of a breakout occurring should ETH hit $1,400.

Grayscale recently registered trusts for Aave, Polkadot, and Uniswap in a move that could bring significant investment to the DeFi space.

The institution stated that registering the trusts is not a confirmation that those trusts will open, and the market awaits further developments. Uniswap has now surged 275% over the last month, trading near the $20 mark last week before settling back down to around $18.35.

The DeFi market is now worth $27.61 billion, with Maker dominance at 17%.

Source: DeFi Pulse

Maker’s TVL stands at $4.84 billion followed by Aave at $3.97 billion.

Meanwhile, Eth2 is due a major update some time midway through 2021, according to a developers’ call that took place on January 14.

Teku client project manager Ben Edgington was hesitant to describe the update as a fork, saying “there shouldn’t even be a fork when this upgrade is done, in the sense of the network ending up with multiple competing chains.”

The update should introduce infrastructure for light clients as well as a change in penalties for non-participating validators and a new method for calculating rewards aimed at reducing errors.

Market Influence

Rapper Soulja Boy, who recently made headlines for considering launching his own collectible crypto NFTs, tweeted out an Ethereum address on January 29 to his 5.2 million followers.

A domain squatter alerted Soulja Boy to the fact that he had already registered the SouljaBoy.eth domain on ENS Domains. After reaching an agreement with the rapper, the ENS name was transferred but became stuck after it transpired that Soulja Boy had provided his Coinbase wallet address and not an unhosted wallet address. The name is now stuck until Coinbase take technical action to resolve it. A small demonstration of the user experience issues that persist with this technology.

Billionaire Mark Cuban recently revealed that he holds a lot of “shitcoins” as well as Bitcoin and Ethereum, including low-cap DeFi and ERC20 tokens.

The wider crypto market continues to show strong fundamentals. Major U.S. universities such as Harvard have reportedly been buying Bitcoin, and billionaire hedge manager Ray Dalio appears to be coming around to the asset.

Exhibiting a change of heart from the anti-Bitcoin statements of his past, Dalio wrote in a recent investors note that Bitcoin may go on to have longevity and value in the future.

Twitter founder and Bitcoin advocate Jack Dorsey recently tweeted out the word “Few” to his 5.1 million followers, a somewhat cryptic reference to the “few understand” meme that came about during the DeFi summer of 2020. This Tweet may have been coincidental, but as the CEO of CashApp there seems a real possibility that DeFi may begin playing a role.

Media Roundup

ConsenSys is hosting a webinar on institutional staking with Eth2 on February 4. Custodians, funds, and exchanges can earn 9% APR for securing Ethereum with Codefi staking, and the ConsenSys webinar aims to demonstrate how this is possible as well as go through opportunities and security concerns.

2,833,858 ETH has been staked since December 1, according to the webinar post. ConsenSys state that establishing infrastructure and maintaining validator software will require “complex technology development and solid security expertise,” hence the need for Codefi Staking.

Tech Training solutions is hosting an Ethereum training course in Dublin starting on February 04. 

The event states that “this is a course for those who have no programming knowledge, yet would like to learn ethereum blockchain development, how to develop a blockchain application, smart contracts on ethereum blockchain application,” adding that attendees should be able to run their own smart contact by the end of the course.

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Conor Maloney
Conor Maloney Analyst