The Ethereum price, analysts say, is in a pent-up, stable and ready for the next wave higher.
As of writing, ETH is up nine percent week-to-date, slightly in the red over the last 24 hours but in an uptrend as per candlestick arrangement in the daily chart.
The Buildup to EIP-1559 and the London Upgrade
While ETH/USD prices stagnate in smaller time frames, there is a buildup in trading volumes, an indicator of participation, and possibly an indicator of what lies ahead.
Notably, the entire Ethereum ecosystem is looking forward to EIP-1559 and London Hard fork activation today.
The upgrade will introduce fee burning, gradually withdrawing ETH from circulation over the long haul.
Ethereum will be scarcer than gold in supporters’ view, a move that would turbocharge the coin’s valuation above $3k in the days ahead.
$ETH fans are excited as #crypto experts expect the London Hard Fork to go into effect on August 4th. This release is an integral part of #Ethereum 2.0. This will replace the current proof-of-work model with a proof-of-stake model which will bring lower energy-consumption levels. pic.twitter.com/ioJHaFeYsB
— DeFi News Network (@DeFiNewsNetwork) August 3, 2021
Combined with the migration towards Eth2 and staking, eliminating miners, and activating more Layer-2 options helping scale the base layer, ETH holders and the broader community expect fireworks in the days ahead.
Rising DeFi Activity
Meanwhile, as the community building up to the London Upgrade, there is an evident uptick in activity in DeFi.
Following dips in the last months of H1 2021, there is a revival on DeFi, directly pumping its tokens.
After the rally of late July, assets like UNI and LINK have broken above resistance lines, subsequently fanning demand for DeFi—and tangentially, NFT, which is increasingly intertwined with the former.
Ethereum Price Analysis
At the time of writing, ETH prices are stable.
From the daily chart, yesterday’s bar closed with a long lower wick suggesting demand in lower time frames.
As such, the retracement after solid gains of late July 2021 might have offered an opportunity for aggressive traders to double down, buying the dips in lower time frames.
Several indicators are pointing to this possibility.
For instance, despite the double bar, the bearish engulfing pattern of Aug 3, accompanying trading volumes are relatively low. Besides, prices are tracking along the upper BB in a bullish breakout pattern, pointing to high underlying momentum and volatility—BBs are diverging.
Accordingly, ETH/USD bulls could refine their entries as long as prices are above the $2.4k—June and July 2021 highs—while aiming at $2.9k in the short term.
Unexpected dumps below this mark invalidate ETH/USD uptrend.
Technical charts courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
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