The Ethereum price is wobbly, fluctuating by wide margins despite strong fundamentals. However, this doesn’t mean bulls are weak or the uptrend flimsy.
Indicators show that buyers continue to press the pedal. The result is a strong performance driven by even stronger fundamental events.
DeFi: the rise of Uniswap
For the success of any blockchain, its utility is key. Ethereum is by far the most active.
The rise of open finance, or DeFi, the increasing tokenization of Bitcoin, and new concepts being experimented on Ethereum translate not only to high transaction count but high fees for miners.
A case in point is the rise of Uniswap as a leading decentralized exchange drawing the most trading volumes incentivizing the participation of market makers. Earlier, it was revealed that Uniswap generated almost half of the total Bitcoin transaction fees.
Meanwhile, those from Ethereum were approximately 3X Bitcoin’s. This goes on to show how dominant Ethereum dApps are.
The rise of Ethereum is definitely between its capacity to tokenize assets, allow experimentation, and most importantly, enable diversification.
It is this diversification and ability to significantly improve earnings drawing more resources from the Bitcoin network to Ethereum for DeFi.
The net result is the expansion of the total amount of ETH locked by DeFi dApps, which at the time of writing, exceeds $6 billion.
USDT chain swap from Tron to Ethereum
While DeFi is the focus, there is an interesting development as far as the stablecoin landscape is concerned.
Data reveals that over 23 percent ($1 billion) of Tron’s USDT was moved to Ethereum. Swapped early Thursday morning in conjunction with a third-party, the $1 billion worth of USDT was moved to where over half of the total USDT supply resides.
It is likely that Binance requested Tether Limited to swap USDT from TRC to ERC versions to perhaps cope with increasing demand.
Overly, being the most active stablecoin, analysts say the propensity of users to use USDT over the competing platform is heaping pressure on Ethereum.
Previous Ethereum clogs have been consequential for DeFi dApps. Earlier, MakerDAO lost over $8 million when zero bids were placed for ETH collateral.
EIP-2878 rejection by miners
Ethereum miners are resisting attempts for a proposal suggesting further slashes of mining rewards.
Forwarded through EIP-2878, miners hold that proponents of this suggestion are not interested in the security of the network but rather the interest of investors.
In the current POW setup, miners play a crucial role in securing the network, begrudgingly accepting a thirding of their rewards during Constantinople.
Ethereum price analysis
Week-to-date, the Ethereum price is solid and maintains a firm uptrend. Coin trackers reveal that the coin is up five percent against the greenback and relatively at parity with BTC.
From the daily chart, candlestick arrangements suggest exhaustion. However, whether bears will step up and press the sell pedal will depend on whether prices trend above the 20-day moving average—the middle BB.
Thus far, ETH prices are trending above the flexible support line with bulls likely to be confirmed by the end of the day. The result will be a double-bar reversal pattern.
As it is, traders can buy the dips, syncing with the dominant trend. Alternatively, the risk-averse can wait for a sharp break above $450 with high trading volumes preferably exceeding those of August 2 to place orders with targets at $500.
Losses below $400 and the middle BB could see ETH prices collapse to $350.
Chart courtesy of Trading View
Disclaimer: Views and opinions expressed are those of the author. This is not investment advice. Do your research.