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Ethereum Price Preview: September 21 – September 26

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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.

Last week saw record new transaction volumes and mining fees as DeFi momentum continued to build with a TVL that has approached $10 billion according to DeFi Pulse. In this piece, we take a look at the risks and fundamentals that may be impacting Ethereum price for the week ahead.

Fundamentals Continue to Firm Up

Despite a drop in price to the mid-$300 range, Ethereum fundamentals have only become stronger over the last week. Etherscan site traffic hit the highest levels since the 2017 ICO frenzy, indicating significantly higher public interest in ETH.

Transaction numbers have smashed through previous records to reach new highs amid the ongoing DeFi boom. Miner fees came in at a record 46,763 ETH on Thursday, worth $16.4 million on the day. Meanwhile, daily volumes hit 1.4 million transactions, a 400,000 increase on previous days and well above the previous record of 1.34 million transactions which was seen in January 2018.

Decentralized Exchange Volume Rises $4 Billion

DeFi Prime shows that volumes for decentralized exchanges rose $4 billion to $16 billion in August, another solid indicator that the DeFi boom underpinning much of Ether’s price action is in full swing. Compared to the volumes of just $600 million at the beginning of the year, the data shows the startling progress made in DeFi in recent months.

Source: DeFi Prime

Bitcoin tokenized on the Ethereum network surpassed $1 billion last week with Bitcoin holders moving a massive $450 million into Uniswap’s liquidity mining program.

While DeFi has not been without its failures, scams and shady launches, other projects have seen huge success. Uniswap’s newly-launched UNI token rocketed from $2.50 to over $8.00 in the days following its launch, causing Uniswap to rise to #1 project by TVL in the DeFi ecosystem according to DeFi Pulse. Uniswap is now well in the lead with $1.94 billion TVL.

Important ETH 2 Test Due Next Week

The Spadina testnet goes live on September 29 as a final check of the genesis event for ETH 2. The testnet is designed to function as a “dress rehearsal” for developers and users who want to practice submitting deposits and starting their validator clients from genesis. This network is “semi-public”, meaning everyone is welcome to participate but it’s not being heavily advertised as a public testnet.

ETH 2 developers have clarified that Medalla is the main public testnet, while the September 29 event is just a network launch test.

The success of ETH 2 scaling is a crucial piece for the success of the burgeoning DeFi industry and time is of the essence. On Thursday, well-known crypto economist Alex Krüger made a rough estimate that there may be as few as 114,000 DeFi users active on Ethereum.

This relatively small number is already straining the network to capacity. Coinbase, as Krüger mentions, hosts 32 million users by comparison. ETH 2 needs to demonstrate the ability to scale to tens of millions of users in the future in order to secure a healthy and thriving Ethereum ecosystem that is open to all.

In the meantime, network use continues to grow at a rapid pace, and this may well lead to upward price momentum in the near term.

Media Roundup

Today, Monday 21st September, Ethereum Sao Paolo is hosting an event with approximately 40 attendees. The name of the Portuguese-language event translates to “0 to Hero: Discover new tools to improve Solidity,” and focuses on using the Solidity programming language in blockchain software development.

Token Engineering Berlin is hosting a meetup on September 24 called “Meet the TE Commons!”. The TE Commons is a token economy which will be distributed to relevant project in the token engineering industry.

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Conor Maloney
Conor Maloney Analyst