Ethereum Price Forecast – ETH/USD Up for Premium Correction – Brace for Buying!
The ETH/USD rose on Monday amid some progress towards finding opposition from Ethereum miners to the scheduled changes to the network’s fee market named Ethereum Improvement Protocol (EIP) 1559. The Controversial EIP-1559 has raised the tensions between Ethereum miners and developers over the past few weeks over its impact on miners’ revenue. According to the new approved upgrade EIP-1559 that will come live in July, every time ETH will be used to pay gas fees on a transaction, it would burn a small amount of ETH. In this process, miners’ revenue is expected to decrease, which has raised the opposition for this upgrade from the miners.
Several community members have raised voice against this upgrade and have planned a protest to show force against the upgrade. The threats of these shows of force have been weighing on ETH prices for the past few days as this demonstrative network takeover could threaten the network’s security. However, on Monday, the ETH prices rose again amid a proposal EIP-3369 to resolve the issue by working around the drastic EIP-1559 proposal and raising the block reward.
One of the most influential Ethereum miners drafted a proposal to immediately raise the block reward from current 2 Ether to 3 Ether with gradual decay every quarter for the next two years and then reduce to 1 Ether following EIP-1559’s implementation to ease the impact on miners of Ethereum’s proof-of-stake. This new proposal is yet to be accepted by the Ethereum community; however, it has gained some support from both miners’ and developers’ sides. Most support has been gained from miners’ side, as it would raise their revenue from gas fees by 50%. After this proposal, some of the miners even backed out of the protest, which lightens the mood that eventually resulted in raising the price of ETH/USD at the beginning of the week. Furthermore, ETH has also been rising because with the newly approved EIP-1559, Ether tokens’ supply will reduce, and the prices will move higher as the reduction in supply will make the asset scarcer.
On the other hand, the co-founder of Ethereum, Vitalik Buterin, has also been working proactively to solve the blockchain vulnerability by reducing the network’s rising transaction fees through EIP-1559. However, a group of miners has planned a threat to take over the network in a protest against the upcoming upgrade EIP-1559 in July, reducing the amount of reward going to miners. This has resulted in Buterin and other Ethereum responding by planning defensive efforts. Buterin described how quickly Ethereum could perform a merge by rapidly moving from proof-of-work to proof-of-stake with limited changes required to clients. It is yet to see whether the new EIP-3368 gets Ethereum community’s attention or not and how the protest attack on April 1 would go. However, ETH seems to benefit from the prevailing tensions and continuously rises to the next target of $2000.
On the negative side, the IOHK CEO, Charles Hoskinsons, said that over 100 crypto-based companies would move from Ethereum to Cardano as the ADA network has become fully matured. Given the controversial upgrade news regarding Ethereum, Hoskinson expressed his enthusiasm about Cardano and said that ADA has gained popularity drastically these days and has performed successfully throughout the year by bringing many more projects to Goguen implementation. These comments from Hoskinsons capped further gains in ETH/USD on Monday.
On the Bitcoin front, the king of cryptocurrency broke its previous all-time high of $58,000 over the weekend and reached above $61,000. The rise in Bitcoin prices could also be a reason behind the surging prices of Ethereum on Monday.
Daily Technical Levels
Pivot Point: 1873.58
The technical side of the ETH/USD seems unchanged as it’s trading with a bearish bias, falling to the $1,768 level and facing immediate support at the $1,732 level. Ethereum is likely to bounce off over the $1,732 level; however, if the pair fails to bounce off over this level, we may see a sharp drop until the $1,651 level. On the higher side, the pair may find resistance at $1,876 area. The 20 and 50 periods EMA are also in support of a selling trend. Let’s keep an eye on the $1,732 level to buy over and sell below this level. Good luck!