On a weekly basis, Ethereum (ETH) is a little bit stable and down one percent. However, prices are trading within a range in lower time frames.
Though the market is relatively expectant, the lack of consensus on how to best implement crucial EIPs just before the metropolis Constantinople hard fork set for mid-Oct is worrying.
Hard decisions must be made and should there be a window that allows for a fragile network, ETH will most likely dip, reversing recent gains.
Ethereum (ETH) – Fundamentals
Apparently, Ethereum developers are under pressure. A metropolis hard fork, Constantinople, is staring right in their eyes with implementation set for mid-October of this year.
The contention here is on several major Enterprise Integration Patterns (EIPs), an equivalent of Bitcoin Improvement Proposals (BIPs) that are by design meant to be incorporated with the fork come October.
However, the developer community is deeply divided on whether to slash ETH rewards per block and alter the hard code of Ethereum’s difficulty bomb as network prepares for Casper, a Proof of Stake consensus algorithm. The miner community is having none of it.
This was expected, most miners are businessmen who have identified a niche in cryptocurrency and should rewards be slashed, then Brian Venturo, the co-founder of Atlantic Crypto, a firm with 3,000 GPU rigs says there will be no benefit and they will just shift their rigs and mine other coins as long as they are on the green regardless of location.
All in all, EIP 1234 is contentious and should consensus lack, then it will set a bad precedence for Ethereum going forward. Though there might be a compromise whereby block rewards would be slashed to 2ETH and adjustment of difficulty bomb delayed for another 18 months, the fact that the community has been allowed to decide on block rewards would be spawning ground for unnecessary forks.
At center stage is a road map feature, Metropolis Constantinople hard fork where the community is still split on whether ready EIP solutions should be executed or if hard forks be done every eight months subject to EIP community agreement.
Ethereum (ETH) Price Technical Analysis
ETH coin price – Weekly Chart
If we link Ethereum specific fundamentals to price action then we notice that prices are following tow.
The lack of consensus is a negative for the coin and so is events after week ending Aug 12 candlestick.
Then we notice that not only did prices break below$400 and $350 support zone—now resistance, but it was accompanied by high volumes and confirmed by the two consecutive bear candlesticks including that of last week.
Despite these recent revivals in the last two days, effort versus result scenarios aren’t supportive of ETH prices when we take a top down approach. Ethereum is trading within a bear break out pattern triggered by that bear engulfing candlestick of week ending Aug 12.
Therefore, for buyers to cement their positions then we need to see high volume, wide trade range rejection of bears and a possible breach of $350 main resistance line in the weekly chart.
ETH coin Price – Daily Chart
In the last day, Ether prices added three percent paling in comparison to that high volume bull candlestick of Aug 27.
Nonetheless, this is normal and historical prices can show that high volume break outs or rejection of lower lows are often followed by periods of consolidation or a tight trading range. Regardless, we expect a follow through as long as prices remain above $270.
From the chart, we shall retain a bearish outlook and we shall nullify our projection once we see prices edging past $330 or Aug 17 highs. Before then, we suggest taking a neutral stand until proper signals prints on the chart indicating solid buy pressure in the midst of an eight month bear move.
Disclaimer: This is not investment advice and views represent those of the author. Do your own Due Diligence before making investment decisions.
