Ethereum underwent a severe correction over the weekend which saw its price drop by more than 18%. The smart contract giant has gone from a high of $ 215 to a recent low of $ 175.5.
Despite the importance of this decline, multiple technical and fundamental reasons suggest that the Ether is linked to a bullish momentum.
Bullish momentum builds up
From a technical point of view, a renowned technical analyst within the cryptocurrency industry. told me
The cartographer believes that the downward momentum allowed ETH to exit an upward parallel channel. This technical training could contain the action of the ether prices since the black Thursday of March.
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Since then, each time Ethereum rises to the upper limit of this channel, it recedes to touch the lower edge, and from there it recovers again. This is consistent with the characteristics of a parallel channel.
Now that Ether has broken this pattern in a downward direction, the analyst thinks it might be on the verge of falling further. The next level of support is provided by the 50% and 61.8% Fibonacci retracement levels. These support barriers are located at $ 158.6 and $ 142, respectively.
However, before all of this happens, the trade fan expects a move towards $ 210. Such bullish momentum could serve as a bounce from a dead cat that leads to the support levels mentioned above.
A major network update on the Ethereum horizon
Despite the fact that the aforementioned technical analyst argues that in the long term, Ether could fall further, the long-awaited pre-launch period for ETH 2.0 could be bullish.
This major network upgrade is poised to solve the scale problems the smart contract giant has faced over the years. It will also introduce a proof of stake algorithm that will allow investors and market participants to receive a reward for the number of tokens they hold.
The release date remains uncertain, but regular updates from different developers indicate that ETH 2.0 is taking shape. In late April, for example, Eric Connor, Ethereum developer, sharing An update on the status of the ETH 2.0 test network.
“The first phase of Ethereum 2.0, phase 0, is the tag chain. For the first time, a variety of new customers will work together on a new blockchain with a new and unique approach to networking and consensus, "said Connor.
As speculation grows about the upcoming release of ETH 2.0, the Santiment data reveals that retail investors have been accumulating ether massively over the past six months. The number of addresses with balances between 0.001 and 1000 ETH is increasing rapidly.
Although the distribution of the holders is not necessarily a price predictor, it certainly gives a glimpse of the vote of confidence that investors give Ethereum. Now it remains to be seen whether this altcoin will work or not.
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