The Ethereum price is wobbly at the time of writing. However, there are flickers of hope. Ethereum is the preferred platform—if statistics lead, for dApp developers.
Most importantly, it dominates DeFi as most mainstream financial applications run on the pioneer smart contracting platform.
Still, there are concerns as Ethereum finds itself with a fee problem.
Last 30 days tx fees:
– Ethereum $21.6 million.
– Bitcoin $12.1 million.
If Ethereum had PoS, P/E for token holders would be 96.5. For Bitcoin it would be 1142.2.
— Predictions Exchange (@PredictionsExch) June 30, 2020
ZK Rollups to resolve Ethereum’s Fee problem
Uncharacteristic for a network with a Proof-of-Work but a flexible supply, critics now say Ethereum developers are overconfident. This, they argue, will pull the network down just like Bitcoin found itself mired with high fees and scalability troubles.
And this has forced Vitalik Buterin to respond.
Anyone who's *just* moving ETH / ERC20 / ERC721 tokens around should be looking at how to get onto a rollup today. Gasprices on base chain would probably fall greatly if it was only used for the more complex stuff.
— vitalik.eth (@VitalikButerin) June 30, 2020
Although Ethereum is already preparing for the Beacon Chain mainnet launch at a tentative time, probably in July 2020, Vitalik is urging developers to opt for ZK Rollups.
The solution is an improvement of Plasma and specifically makes data more reliable in a Layer-2 setup.
By shifting to Rollups, Vitalik, in a Twitter post, said, the demand for the Ethereum mainnet will drop, drastically slashing fees.
>50% of tx are transfers. Lots prolly just shuttling assets b/w exchanges (arbs). Demand could be reduced by big % if major exchanges agreed to meet on the _same_ rollup.
"Withdraw" from xchange goes to Rollup by default. Despositing it to another xchange = intra-rollup transfer pic.twitter.com/ql2Kb8A13I
— Ali Atiia (@aliatiia_) June 30, 2020
The lower the fees, the more attractive the network becomes for ordinary users who prefer transacting over the network.
In other news, the CEO of the Balancer Labs has said the team will reimburse affected liquidity providers following a heist on June 29, 2020, that saw two liquidity pools lose $500,000.
More on the thought process that the Balancer Labs team went through to decide on reimbursing all the liquidity providers who lost funds in yesterday's incident.
Thank you to all community members who gave essential input to us reaching this decision.https://t.co/PQ686bAWYv
— Balancer Labs (@BalancerLabs) June 30, 2020
The hacker exploited a previously known weakness—thought to be impractical, and used a deflationary token to siphon funds and cover tracks.
Ethereum price analysis
Regardless of traders’ optimism, ETH fundamentals diverge from price action. Sellers seem to be in charge, adjudging from candlestick arrangement in the daily chart.
From the chart, not only has sellers reversed gains of June 22, 2020, but prices are trending below $230—previous support now resistance. At the same time, price action suggests that there is a confirmation of the double-bar bear reversal pattern of June 10-11, 2020.
Since prices are trending below $230 and the three-month support trend line (now resistance), the path of least resistance is downwards. Unless otherwise there is a sharp uptick of trading volumes reversing recent losses and driving ETH above $230, bears are in control.
Immediate support (and a potential bear target) is $200. Any drop below this mark could spur further losses toward the $170-$180 zone.
Technical Chart courtesy of Trading View
Disclaimer: This is not investment advice. Opinions expressed here are those of the author and not the view of the publication.