This article will analyze Ethereum’s market dynamics through current developments of the network, performing technical analysis, and price action to determine whether it is a good time to invest in the cryptocurrency.
Ethereum is the second largest cryptocurrency by market capitalization and has established itself as a leading player in the crypto space. It was created in 2015 with the aim of becoming a decentralized platform for building decentralized applications (dApps) and smart contracts. Unlike Bitcoin, which primarily serves as a store of value, Ethereum provides a blockchain platform that enables developers to build and deploy a wide range of decentralized applications.
Over the years, Ethereum has seen significant growth in terms of both its technology and its ecosystem, attracting a large developer community, partnerships with major corporations, and a growing number of decentralized applications. These factors have contributed to Ethereum’s status as the second largest cryptocurrency and have solidified its position as a key player in the crypto space.
The Shanghai upgrade is fast approaching
Ethereum’s Shanghai upgrade is a hard fork that is scheduled to occur in March 2023. Since the Merge in September 2022, validators have been extremely important to the Ethereum blockchain because they were required to lock away their ETH as well as any incentives they had earned until a later chain upgrade.
Validators will be able to recover all of the ETH that they have staked as a result of the Shanghai hard fork, and they will potentially be able to get in line to retrieve their staked tokens and remove them from the system. Almost 14% of the ETH supply will be unlocked.
A withdrawal queue has been created by Ethereum developers to avoid any selling pressure in the markets. Only six validators, each worth 32 ETH, are permitted to leave the network throughout each epoch. Therefore, a total of 1,350 validators are permitted to withdraw each day.
Indicators
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Ethereum has successfully broken through the 200-day moving average resistance, and it is now hovering above it, indicating that traders have a bullish sentiment for the second biggest cryptocurrency.
In order for the bullish case for Ethereum to continue, it is necessary for the price to maintain its position above higher time frames. The longer a certain cryptocurrency’s support has been maintained, the stronger the support is expected to be.
Should you buy now or wait?
On a non-logarithmic scale, and by using the line chart to avoid wicks, Ethereum on the weekly can still retest the trendline as support of the falling wedge.
Ethereum will be making big moves in 2024 once the price has tested the line as support. The best course of action is to wait and make sure to set your buy orders in advance to catch massive dips in Q3-Q4 of 2023.
Final Thoughts
Because of Ethereum’s robust developer community, creative usage of smart contracts, and position as a pioneer in the quickly expanding decentralized finance area, it is a fantastic investment opportunity independent of its price movement. With its capacity to run sophisticated decentralized apps, Ethereum has a large amount of room for expansion. Ethereum is a tempting investment opportunity for anyone wishing to enter the blockchain industry because of its distinctive characteristics and capabilities, which positions it well for long-term success as the blockchain ecosystem continues to develop and mature.