The Ethereum price is on steroids. Quite literally. There is no slowing down. Its community is vibrant and ancillaries which make Ethereum whole are on over-drive.
The explosion of DeFi—and gas prices
The DeFi scene is exploding, pushing ETH and Gas prices higher.
Notably, development around exciting market-making strategies for Ethereum DEXes is noteworthy. By building on decentralization principles and creating a robust, liquid system complementing the demanding DeFi ecosystem, ETH holders are emerging as major beneficiaries.
This was largely expected since price follows utility which is in turn pumped by demand. The higher the demand, the higher the price of ETH—at least on paper.
BitGo sidechain plans
To keep up with DeFi demands, BitGo—a crypto asset custodian, earlier said it was looking for ways of building an Ethereum sidechain for wBTC.
It is a tokenized version of Bitcoin conforming to ERC-20 standards. Instead of simply holding and reaping capital gains, there is an opportunity for the BTC holder to participate in the lucrative DeFi scene.
By either lending or providing liquidity to a pool, the owner earns attractive interest without giving up on capital gains. Every wBTC is pegged and redeemable for BTC.
In an email to CoinDesk, the CTO of BitGo said:
What we’ve seen this year is that WBTC traction has been largely thanks to the highly composable DeFi industry. We will reach out to the community partners to see if they are interested in embarking upon a sidechain together.
The Phase 1 demonstration
To tackle high gas fees–now synonymous with Ethereum and DeFi, the development team is looking for an Eth2 solution. Phase 0 will be activated at a tentative time in the next five months or so.
It may be months away but the team has now released a Phase 1 prototype demonstrating Eth1 transfers in a more scalable, low fee environment of Eth2.
The demo, written in Kotlin, is developed as part of the Eth1-Eth2 merger project.
Ethereum price analysis
Trading at $434 a pop, the Ethereum price is outperforming both the USD and BTC. In the last week of trading, the coin is up a ballpark 10 percent against both pairs.
From the daily chart, bulls are back in full-swing, trending higher as participation increases as volumes data reveals. After a brief consolidation, the Ethereum price is now trending above the 20-day moving average with decent volumes as price action snaps back to trend after bouncing back from the previous resistance-now-support trend line marked by the bull flag.
Nonetheless, participation isn’t climactic. Unless otherwise there is a sharp rally past Aug 2020 highs of $450, Ethereum price bulls should tread cautiously. $450 is an important resistance level. While bulls can buy the dips expecting utility to drive ETH demand, trend-defining volumes should exceed the daily average of the first three weeks of Aug for confirmation.
A break above $450 will heighten volatility, possibly opening doors for $500.
Disclaimer: All writers’ opinions are their own and do not constitute financial advice in any way whatsoever. Cryptopolitan strongly recommends that you perform your own independent research and/or speak with a qualified professional before making any investment decision.