The Ethereum network has seen an upward trend over the past four weeks. Ether has rebounded more than 30% from its May low of $ 1,800, hitting $ 3,500 a few days earlier. Coupled with its recent London hard fork that made its utility token deflationary, several investors are eager to buy ETH. This article tracks the price history of Ethereum over the past 24 hours and whether this might be a good time to buy ETH.
Ethereum: changing the face of finance
A group of eight developers launched Ethereum in July 2015. By leveraging Bitcoin’s blockchain technology and core consensus algorithm, Ethereum enabled the trustworthy transfer of any asset in seconds.
However, there were a few things that set Ethereum apart from the older decentralized network. At its core, Ethereum was designed to enable the development of smart contracts, which are critical to building blockchain-based applications, aptly referred to as decentralized apps or dapps.
These trusted financial instruments spawned Decentralized Finance (DeFi), which has since revolutionized financial services as we know them. However, the Ethereum network has been plagued by a specific problem; Choice of mining protocol.
Using proof-of-work (PoW) mining protocols like Bitcoin has impacted its performance and gas charges (network charges for using the Ethereum network). PoWs are slow in block finality, use a lot of energy to validate transactions, and result in high network charges.
Ethereum’s success in bringing DeFi and non-fungible tokens (NFTs) to the fore created problems for the network as its performance lagged behind its success. Therefore, the network is looking for a transition to a newer consensus algorithm with less power and faster validation output.
On its way to a Proof-of-Stake (PoS) protocol, the London hard fork was recently introduced, including the famous EIP-1559, which allows a certain amount of mining fees to be burned. This has caused ETH to become a deflationary token, much like BTC, and several investors are on the lookout for ETH.
ETH rides the crypto waves
The crypto market got into a serious hook in May after regulatory measures by China and open criticism and the subsequent ban on Bitcoin payments by Tesla. This caused the burgeoning industry to spiral out of control, with over $ 1 trillion off the market in a matter of days.
Crypto activity hit an all-time low, with the value of the broader market plummeting 50%. The three-month hiatus has served the emerging industry well, and August was a major driving force.
The bulls have returned and ETH has seen its value rise too. Trading at $ 1,800 during the bearish lull, the digital asset rose more than 30% in a matter of days to hit $ 2,800. ETH has continued its remarkable recovery, delivering more massive returns over the past 48 hours.
With the spike in NFT and DeFi activity in August, ETH rose from its May high of $ 4,350 on September 1 to a record $ 3,834.83. The digital asset shows intent to outperform that and is currently trading at $ 3,957.95, up 5.50% in the past 24 hours. Such bullish potential is a signal to buy ETH as it could hit $ 5,000 before the end of the year.
ETH technical and fundamental analysis
ETH is in strong bullish momentum on the trading chart. The second most valuable cryptocurrency trades above the 20-day moving average (MA) support price of $ 3,321.64. The Relative Strength Index (RSI) is also bullish as it currently indicates that ETH is overbought at 73.98. If a high RSI doesn’t bother you, this might be a good time to buy ETH.
Ethereum is also showing great fundamental growth. On August 31, off-chain labs launched the highly anticipated Arbitrum One on the Ethereum mainnet.
This is intended to help the blockchain platform scale and process transactions faster. It will also address the long-criticized Ethereum gas fees, which have increased due to the high network traffic. So far, over 400 teams are working on building the multi-scaling solution. Given its unique role as a digital currency for the rapidly growing DeFi subsector, ETH’s institutional acceptance is increasing.
According to CoinShares, a digital asset management firm, ETH-based products were the most heavily traded asset, with weekly inflows of over $ 17 million. It is also said that institutional investments in ETH account for 32% of the sector’s total assets under management (AUM).
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About Jimmy Aki PRO INVESTOR
Jimmy is a UK-based economist with outstanding hands-on and face-to-face experience in macroeconomic financial analysis, forecasting and planning. He has refined his skills through a cross-continental activity as a financial analyst, which gives him intercultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him to peek under the global hood to see how the world works.