Ethereum Technical Analysis: Why $1700 Level is a Crucial Support for ETH Price

Key Takeaways:

• Ethereum is one of the most important tokens in the crypto market today as it is the largest altcoin by market capitalization of $210 billion as of writing this article and, at the same time, also happens to be the largest smart contract-capable crypto project out there.
• ETH price has had a strong rally in 2023, gaining nearly 80% to touch $2100 at its peak before correctly and currently trading just above $1700.
• For almost the past 4 weeks, ETH price has been hovering around the $1800 mark and now has fallen to $1750 as of writing.
• $1700 will be a very crucial support level for the altcoin king going forward.

Ethereum Technical Analysis

ETH/USD | Source: TradingView

• Broadly, Ethereum’s native crypto token, ETH has been trading with strong bullish momentum ever since the beginning of 2023, as you can observe in the chart above. ETH price had created a steady higher high, higher low price pattern on the chart, which indicates a stable upward trajectory for the future.
• However, love the past month or so, since May 2023 – ETH, along with the rest of the market, has resorted to trading within a range, hovering around the $1800 mark.
• This also coincides with the broad historical consolidation range that Ethereum has formed since early 2022 (marked in grey) between $1700 to $2100. This is a range that would be difficult to breach past.
• Incidentally, ETH price is currently trading barely above the $1700 mark and from a technical point of view, it would be necessary for ETH bulls to maintain this support level and not let the bears flip it. A breakdown below this could result in a follow-up correction down to $1400 – which is a nearly 18% drop in price.
• So far, the long-term trend for the altcoin king has continued to be moderately bullish, as it is still trading above the 200-day exponential moving average (marked in purple), but it has broken down below the 50-day exponential moving average, indicating near-term bearishness. If this continues, we could eventually see the bearish crossover of the 50 and 200-day EMAs, which is also known as a “death cross” and would bring about further selling pressures into the market.
• Thus, for the time being, it becomes exceptionally crucial for ETH price to maintain above the $1700 mark.

Read more: Ether Price Prediction

Ethereum: The Way Ahead

As Ethereum continues to evolve, several significant upgrades are paving the way for its future development and growth. Two notable upgrades that have garnered attention are the recently completed Ethereum Shanghai upgrade and the upcoming Ethereum Dencun upgrade. Let’s delve into these upgrades and explore what they mean for the Ethereum ecosystem and, finally the price of its native token, ETH.

The Ethereum Shanghai upgrade, which took place in April 2023, introduced crucial improvements to the Ethereum network. This upgrade aimed to enhance the network’s scalability and security while improving the overall user experience. Notable changes included the implementation of EIP-3541, which introduced a new gas cost scheme for state access, making smart contract execution more efficient. Additionally, EIP-3554 addressed a vulnerability related to the Ethereum Improvement Proposal process, ensuring better security and governance.

Looking ahead, the Ethereum Dencun upgrade is expected to take place by the end of 2023. This upgrade holds great significance as it introduces substantial changes and improvements to the Ethereum ecosystem. The Dencun upgrade encompasses various Ethereum Improvement Proposals (EIPs) that aim to enhance scalability, reduce fees, and improve overall network efficiency.

One of the key features of the Dencun upgrade is the implementation of EIP-4844, also known as proto-danksharding. This feature introduces sharding capabilities to Ethereum, allowing the network to process transactions in parallel across multiple shard chains. This scalability enhancement is expected to significantly increase the network’s capacity to handle a higher volume of transactions, leading to improved transaction speeds and reduced fees.

The Dencun upgrade also incorporates other EIPs designed to optimize the Ethereum network. EIP-1153 reduces fees for on-chain data storage, enhancing blockspace efficiency. EIP-4788 focuses on improving bridge and staking pool designs, further enhancing the network’s interoperability and staking capabilities. Additionally, EIP-5656 introduces minor code changes related to the Ethereum Virtual Machine, improving its performance and functionality.

Thus overall, with major developments coming its way – Ethereum is well positioned to further strengthen its position as the top smart contract-capable crypto asset in the market today. Its focus on improving scalability and reducing transaction costs – two of Ethereum’s most significant pain points – can be expected to pay off positively for the token in the near future!

Values as on June 12, 2023.