In the past week, Ethereum, the second most valuable cryptocurrency in the global market, has experienced a strong upward movement, recording an additional three percent increase in value on the day.
Within seven days, the Ethereum price has increased from $117 to $159, by over 35 percent against the U.S. dollar, making it one of the best performing crypto assets throughout the past two months.
Can the Constantinople Fork Effect Continue to Fuel Ethereum?
Analysts have attributed the positive price movement of Ethereum to its upcoming Constantinople hard fork. The fork is set to decrease the block reward of Ethereum from 3 to 2, reducing the potential circulating supply of Ethereum in the long-term.
Major cryptocurrency exchanges have announced support for the hard fork which is expected to occur between January 14 to 18.
“We will support the Ethereum (ETH) Constantinople hard fork and will take a snapshot of all the OKEx accounts at the block height 7,080,000 (which is estimated to occur between Jan 14 – 18),” the OKEx team said on January 4.
With no contentious hard fork proposals on the horizon and the overwhelming majority of the community supporting Constantinople, the protocol change is likely to be completed with minimal network disruption and a short period of trading suspension on cryptocurrency trading platforms.
According to a cryptocurrency trader with an online alias “The Crypto Dog,” Ethereum is currently testing a major resistance level above the $160 mark.
In consideration of the performance of the asset throughout the past two weeks and the momentum fueled by the imminent Constantinople hard fork, Ethereum is expected to test important resistance levels with strength.
But, the trader said that despite the optimistic price movement of the asset, due to its 80 percent gain in the last three weeks, an entry in a high point could pose a risk to investors.
The trader said:
ETH facing serious resistance on the ratio pair here. It would be incredibly bullish if Ethereum could hold above 0.04 vs BTC. I am not looking for longs at this level. Hard fork shenanigans could certainly push this much, much higher, and ETH could possibly break up on this push, but to me an entry here is hard to justify. Just to be clear – I’m not bearish on ETH right now, the ETH / USD chart isn’t exactly showing ‘weakness.’
Crypto Market Still Volatile
In late December, the cryptocurrency market demonstrated signs of a potential recovery as Bitcoin climbed closer to the $4,000 level.
However, since January 3, digital assets have seen a decline of around $3 billion from their combined valuation and the asset class is not showing indicators of a rapid short-term bull run.
As traders anticipate the Constantinople hard fork, the Ethereum price could increase beyond the $160 mark but the rest of the cryptocurrency market has not been able to record high daily volumes nor a noticeable increase in trading activity following a stagnant week from Christmas to New Year.
Featured Image from Shutterstock. Price Charts from TradingView.
Last modified: March 4, 2021 3:17 PM