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Ethereum Price Preview: July 27 – August 2

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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.

The past week has seen several major events that may have a bullish impact on price action in the coming days and weeks. Let’s take a look.

ETH Leads Bull Run

Source: ethereumprice.org

As was anticipated by ethereumprice.org analysts in recent months, ETH has kicked-off a rapid price rally after a long period of consolidation. The price of Ether has soared above its 1 year high, reaching the highest point since June 2019 and up 300% since its March 2020 low of $80. Exchange data from Deribit is also showing a significant expectation that ETH will trade over $400 in the months ahead.

The major price dip in March, which became known as “Black Thursday“, caused a liquidation cascade in Bitcoin, tanking crypto prices market-wide. ETH plummeted from $194 to under $90 within 24 hours, leading many to believe the cryptoasset was oversold and that – with the increased demand for Ethereum block space – a bull run was around the corner.

As ethereumprice reader Nullius pointed out last week, Black Thursday occurred 20 weeks ago, meaning that this anomalous drop will no longer be factored into the 20-week moving average (MA), a commonly-used trading indicator. The 20-week MA is about to cross the 50-week MA, likely triggering buy orders from automatic trading bots and this automated buying may move the market and drive prices even higher.

Other fundamentals are also extremely promising. DeFi now holds an incredible $4 billion in locked assets, just months after breaking the $1 billion milestone. The gaps between each subsequent billion dollar milestone have been increasingly shortened as the ecosystem gains assets at a staggering rate.

Ethereum network fees have also reached the highest levels since 2018 amid the latest surge in activity. It’s also interesting to note that Bitcoin price recently hit a 6 month high, breaking the $10,000 mark.

Adoption Moves Forward

Significant steps have been made in crypto adoption over the past week, and this may have a positive impact on crypto prices. On July 22, the world’s leading payment provider, Visa, announced that it will be rolling out support for crypto payments. Visa’s support for crypto is a huge milestone in the pursuit of global adoption for cryptocurrencies.

As reported earlier this month on ethereumprice.org, Visa filed a blockchain patent in March 2018, citing Ethereum as a possible solution for a branded digital currency. The company also hired an Ethereum developer this July.

In a similar vein, a recent regulatory ruling has cleared the way for all licensed banks in the US to offer crypto custody services. American banks can now hold crypto for their clients, raising the profile and legitimacy of crypto as a form of currency and a store of value.

With major payment providers and American banks embracing crypto, mainstream adoption looks set to gather pace.

Progress Towards ETH 2.0

Further progress has been made towards the highly anticipated launch of ETH 2.0 network update. ETH 2.0’s multi-client testnet is now due to launch on August 4, according to an announcement by Ethereum Foundation’s ETH 2.0 coordinator Danny Ryan. Called Medalla, this testnet will be the final testnet before the launch of Phase 0.

The testnet is designed to closely mimic the conditions faced by the real network. Medalla will only launch on August 4 if 16,384 or more deposits of 32 ETH have been committed to the network. 32 ETH is the minimum requirement for staking on the ETH 2.0 network. If this requirement is not met, the testnet will launch 2 days after the total sum has been deposited.

With all else going according to plan, the ETH 2 beacon chain will launch in November. The beacon chain is the layer upon which scaling solutions like sharding will be built among other things.

Media Roundup

The Ethereum Magicians Summer Sessions is on July 29, with topics such as social governance, EIP improvement process and the EIP1559 fee market change.

The event is in collaboration with Ethereum in the Enterprise 2020 Conference, which is hosted by the Enterprise Ethereum Alliance (EEA). Ethereum in the Enterprise 2020 Conference is a major event hosted on July 30. The event features ConsenSys founder Joseph Lubin as well as other high profile speakers from Banco Santander, EY, Microsoft, BP, DTCC, JP Morgan, Unibright, Chainlink, and many more.

RSK and DeFi Lab are co-hosting a Spanish-language blockchain event on July 29. The event focuses around discussion over the use of stablecoins pegged to the Euro rather than the US dollar. The event is sponsored by ConsenSys.

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Conor Maloney
Conor Maloney Analyst