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CELO Announces Ethereum Migration, Preserves 190-Day Support — Next Price Target $1?

Published April 23, 2024 8:47 AM
Valdrin Tahiri
Published April 23, 2024 8:47 AM
By Valdrin Tahiri
Verified by Peter Henn

Key Takeaways

  • The Celo team announced a migration to an Ethereum Layer-2.
  • CELO bounced at a 190-day ascending support trend line on April 13.
  • Can the CELO price begin an increase, or will it lose its long-term support?

The Celo team had been discussing a migration to Ethereum for nearly one year, testing four different Ethereum Layer-2 stacks. After careful deliberation, they announced the selection of the Optimism stack.

The CELO price bounced at a long-term diagonal and horizontal support level but has not confirmed its bullish retest yet. Can CELO’s weekly close confirm a positive signal and spark an upward movement?

What’s Behind the Celo Migration to Ethereum?

cLabs, the company behind Celo, had had been testing the stacks of four Ethereum Layer-2s: Polygon, Arbitrum, ZK and Optimism for its migration to Ethereum. On April 22, cLabs announced they would use the Optimism stack for the upcoming migration.

The Optimism stack will maintain Celo’s features such as 1-block finality, the use of ERC-20 tokens as gas and the ability to send money via SocialConnect. Additionally, it will decrease block time to 2 seconds and will increase throughput by 50%. Coinbase has used the OP stack for its layer-2, Base, and Worldcoin announced it will use it for its own layer-2 solution.

Celo decided to use the OP stack to complete its migration  to Ethereum for three main reasons:

  • Time to production: The OP stack accelerates the deployment, benefiting the Celo community. By using the OP stack, only minimal changes are needed to support Celo’s features.
  • Ethereum alignment: Celo aims to align with Ethereum’s roadmap and its ecosystem so it can integrate new features with a strong foundation. The OP stack closely aligns with Ethereum’s core.
  • Positive-sum platform growth opportunities: Aligning with Ethereum provides strong network effects and reduces friction for future partnerships, potentially increasing collaboration.

As for the next steps, community calls will be held on April 26 and May 2, followed by a community vote. If successful, the testnet will launch in the summer of 2024.

CELO Retests Long-Term Support

The weekly time frame technical analysis shows the CELO price has increased alongside an ascending support trend line since October 2023. The trend line has been validated numerous times, most recently in the last two weeks (green icons). So far, it has existed for 190 days.

The CELO price also has an interesting relation with the $0.85 horizontal area. Before the February breakout, the area had provided resistance for 550 days. If the CELO price closes at the current level or higher, it will confirm that the area has been validated as support.

CELO Price Retests Support
CELO/USDT Weekly Chart | Credit: TradingView

The possibility of a bounce will also have repercussions for the weekly RSI, since the indicator is above 50 (green circle). A price bounce will also cause the RSI to stay above 50, confirming the bullish retest.

CELO Price Prediction: Will a Breakout Occur?

The daily time frame outlook does not confirm the trend’s direction. Since its yearly high on March 11, CELO has fallen under a descending resistance trend line. It is currently making its third breakout attempt (red icons).

If successful, the CELO price can increase to $1.23, the 0.5 Fibonacci retracement resistance level and a horizontal resistance area. This will also confirm the retest of the long-term support at $0.85.

CELO Price Potential Breakout
CELO/USDT Daily Chart| Credit: TradingView

The daily MACD and RSI both support the breakout. The MACD made a bullish cross (green icon) while the RSI broke out from its descending resistance trend line (green). So, a breakout is the most likely future scenario.

Conversely, a rejection from the resistance trend line can cause a retest of the long-term support trend line at $0.80.

CELO Can Salvage Bullish Trend With a Breakout

The CELO price trades above long-term diagonal and horizontal support levels. If the price breaks out from its short-term resistance and closes above $0.85 in the weekly time frame, it will confirm the bullish retest. This can lead to prices above $1 in May.

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