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 overall project.
This week is bustling with events and many market analysts have been pointing to potentially bullish price indicators. Let’s take a look.
Bullish Markets Ahead?
The past month has seen the return of altcoin season with average growth among top 100 cryptocurrencies coming in at 26.8%.
Ethereum appears to be building up bullish momentum with strong network activity, more addresses, and technical indicators signalling upward price movement. ETH prices are holding at lower end of the price to usage ratio, meaning network activity and use has picked up and price may be due to follow.
Prices for ETH futures contracts are almost in line with current prices, another sign that ether may be consolidating and preparing for a sustainable price jump.
Ethereum network activity has been surging in part due to the ongoing DeFi boom which has contributed to increasingly firm fundamentals. The network now has over 100 million active addresses, with 3.20% of ETH tied up in DeFi. Total gas fees have topped $700,000 per day recently.
Bitcoin has also seen improved fundamentals, with the 30-day MA of unique BTC addresses now at the highest point since June 2019.
Last week, the market capitalization of all ERC-20 tokens overtook ETH, an unprecedented development in the space. Ethereum is the first blockchain to support an economy with more value than the underlying native asset and this marks a major milestone in DeFi and the Ethereum ecosystem in general.
It is worth noting that market cap does not necessarily translate into liquid value and so this figure is likely overblown. However, to many, the recent ERC-20 flippening is an indicator that real-world use cases and economies are finally emerging from the blockchain sector.
ETH 2.0 Client Cleared for Launch
Smart contract auditing company Quantstamp has approved ETH 2.0 client Prysm for launch, saying that it is “basically ready.” The ETH 2.0 launch has been hampered by delays and confusing signals from various developers and analysts on the potential launch date, but the green light for Prysm marks further progress.
Of course, the launch isn’t something to be rushed. In an internal company statement, Quantstamp CEO Richard Ma said “Over $28 billion USD worth of ether and other digital assets are potentially riding on the transition to proof-of-stake,” noted Ma in a company statement. “The migration of ether and the DeFi ecosystem to Ethereum 2.0 is a high-stakes process.”
Prysm is currently running on the Altona testnet which launched in late June.
The Ethereum community expects to hear a launch date for a new ETH 2 multi-client testnet early this week. A successful launch and operation will be followed by the ETH 2 deposit contract – which could go live within months.
The launch of ETH 2 could significantly increase Ether’s price, but as Richard Ma pointed out, there are risks attached. ConsenSys researchers Tanner Hoban and Thomas Borgers have voiced concerns that ETH 2 opens up the network to new types of attack, saying “attacks on Eth2 are easier to scale than on Eth1.”
Malicious exploits of derivatives contracts and DeFi instruments like flash loans “could become the favored avenue of attack for adversaries” according to the research duo.
However, the pair clarified that with a gradual rollout and a minimum of 13.8% ETH staked on the network, the community can maintain and even increase network security.
Here are some of the Ethereum events that are taking place over the course of the week.
Ethereum Sao Paulo’s Hackathon is on July 20, with three teams from the Hack The Money event. The Identity Money, Pods Finance, and Atomic Ninja teams will all host talks at the meetup, which has a focus on DeFi protocols.
NFT San Francisco is hosting an event on July 21 called The Portal to the New Virtual Economy. Mintbase Director of Development Caroline Wend will speak at the event on Mintbase’s functionality and use cases, including NFT minting, token sales, and airdrops.
On July 22, Ethereum Engineering Group is hosting a meetup called What’s new in Solidity 0.6.x. Solidity is a programming language used to write smart contracts on the Ethereum network.
Skale’s Governance in POS Networks event is on July 22, and features the founders of Bison Trails, Figment and Blockdaemon. The founders will discuss governance models, the role of validators in developing and advancing PoS networks, different voting mechanisms, and the role of PoS networks now and in the future.