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Ethereum Price Preview: March 29 – April 4


Last week, we discussed the high fees and booming NFT market that have taken center stage in discussion around the development of the Ethereum network. This week, we’ll get into some of the successes and failures seen recently on Ethereum, as well as the more notable sales and sentiment factors of the past week.

Uniswap V3 Launches in May

The hotly-anticipated V3 launch of Uniswap, one of the most prominent DeFi apps, is almost here.

Uniswap revealed details of the launch on March 22, receiving a mixed reaction from the community. However, the new version boasts impressive technical and liquidity-focused updates.

V3 will be 4,000 times more capital efficient than V2, and Uniswap claims that the new implementation will be the most efficient automated market maker ever built. Users stake crypto on the exchange to provide liquidity for various trading pairs, and now these users can gain exposure to greater gains with a fraction of the capital needed before, and far lower downside risk.

Uniswap also licensed the new version in an effort to deter other projects from simply copy-pasting their work, as happened throughout DeFi summer and beyond with Uniswap copies such as Sushiswap. While it’s not possible to fully enforce this due to the anonymous, unregulated nature of the industry, projects breaking the law in this case may receive blowback from regular DeFi users.

While some were disappointed in the apparent lack of fee reduction for the new implementation, it appears that these DeFi users didn’t read the fine print. While the May launch on Ethereum will bring fees just marginally lower, Uniswap will launch V3 on Optimism when the layer-two solution goes live.

This will, in theory, allow for fast, low-fee trading that the DeFi space has desperately awaited since last year. Fees are currently $70 – $140 for most transactions on Ethereum, and Binance Smart Chain alternatives don’t have the same variety or deep liquidity of cryptocurrencies users desire.

The introduction of a fast, low-fee, capital efficient DEX with DeFi’s favorite coins along with the upcoming launch of EI1559 to make ETH deflationary casts a very bullish projection of future ETH prices for many analysts.

Growth in DeFi has been somewhat sluggish since February due to high Ethereum fees.

Currently the industry holds $40.73 billion in total value locked, down from highs seen in March and February above $45 billion. For context, the space held under $700 million at this time last year.

Maker is the dominant protocol with $6.52 billion in TVL followed by Compound at $5.32 billion and Aave at $5.13 billion.

Optimism Launch Delayed

Unfortunately for eager Uniswap users, the Optimism launch has been delayed until July, months later than the original March target.

“The expedited timeline took most projects by surprise and we did not give ample notice for our community to prepare for launch,” said the Optimism team. In theory, the solution is sound, with the test run on Synthetix saving users $10.1 million across 103,775 transactions.

The team made the announcement with the appropriate title of “Optimistically Cautious,” citing the dangers of an uncoordinated and rushed launch including “popular dapps getting forked and launched by adversaries with the intention of defrauding users,” a common problem in the DeFi space.

The news will likely be welcome for competitive chains. Solana’s SOL token saw 14% gains on Sunday despite lower trading volume throughout the market, perhaps due to a migration of sentiment from ETH hopefuls. BNB saw similar gains since Optimism’s announcement.

While the bull case for ETH in the summertime is now two-fold as EIP1559, Optimism, and Uniswap V3 are due to come out at the same time, the short-term case for ETH price may be negatively affected by the news with sentiment likely muted at the moment.

However, ETH has continued constructive consolidation above the previous all-time high, showing strong resilience to the mixed news of the last seven days.

ETH has now grown 2,200% in a year with only a 50% correction, leaving it vulnerable to major downside movements, but the longer this period of consolidation goes on, the more firmly established ETH’s path to higher price points will become.

NFT Market Sees Sales from Jack Dorsey, Pussy Riot

Celebrity NFTs have made a big splash in recent weeks. Twitter CEO Jack Dorsey sold his first ever tweet as an NFT for a total of $2,915,835.47. The winning bidder was Sina Estavi of the Bridge Oracle protocol.

TIME Magazine minted three of its own covers as NFTs, including the iconic “Is God Dead?” cover of the 1970s. The company also announced that it was hiring a new CFO, listing “comfort with Bitcoin” as one of the job requirements.

Pussy Riot, a feminist punk collective whose founders were jailed in 2012 for protesting against Vladimir Putin, also launched an NFT series last week. Founder Nadya Tolokno split the Panic Attack music video into four pieces, selling the first for 100 ETH.

Pussy Riot will also take part in the world’s largest NFT expo to date, due to launch on April 03 in VR in Decentraland. The Graffiti Queens expo features over 200 artists including Pussy Riot, curated by Crypto Yuna of crypto’s Trash Art movement.

Media Roundup

The MIT Bitcoin Expo and Hackathon by the world-famous Massachusetts Institute of Technology is scheduled for April 03 – 04. Speakers include Microstrategy CEO Michael Saylor, the SEC’s FinHub director Valerie Szczepanik, Bitcoin developer Jimmy Song, What Bitcoin Did podcast host Peter McCormack, Kraken Growth Lead Dan Held, and many other prominent figures in the crypto and blockchain space.

Discussion will focus on a variety of topics including regulation, technological advancements, and challenges faced by industry users and builders alike. Teams participating in the hackathon can win up to $4,000.

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Conor Maloney
Conor Maloney Analyst