ETHUSD approaching resistance, potential drop!
ETHUSD 0.39% is approaching our first resistance at 249.27 (horizontal overlap resistance, 50% Fibonacci retracement , 61.8% Fibonacci extension ) and a strong drop might occur below this level pushing price down to our major support at 171.41 (horizontal swing low support, 100% Fibonacci extension ).
RSI (55) is also approaching resistance and we might see a corresponding drop in price.
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Ethereum (ETH) Price Today – BTC / USD
Is Ethereum Dead? Why the Run Down? Will it reach $0?
A lot of people are asking the question, is Ethereum dead? In my opinion the answer is no. I would like to address this from a technical and fundamental perspective. But first, I want to go into the strategy that I am using. If you follow me, you know my primary crypto investing/trading strategy is using ladders in a martingale fashion to take a position.
Right now my average price of entry is just above $300. Obviously, this does not work if I had been laddering in from 800. My average price would be in the 600 range more than likely. However, with an average price of 300, we still have a lot of options and we can go up just as fast as we go down. If you are in my shoes, it’s rather painful. If you are trading forex, stop-losses are necessary to use ladders; however, in crypto I can go into hodl mode while we wait for a move up. Of course this is risky if you believe Ethereum could go to 0 but I do not think that is the case. It also means you could be holding on to your Ether for an extended period of time.
First, why the run down? Is the answer just “because crypto”? Maybe the consensus seems to be, at this point, that ETH can’t scale. ETH was only good for ICOs, etc. If anyone has any other reasons, do share. It’s my feeling that I would rather be invested in Ethereum, a crypto that has purpose.
While Bitcoin is cool, Ethereum can do all the things BTC can, and do them better. BTC has just been around longer so people have confidence in it. Think of it this way, what is backing the dollar? (Yes, libertarians, I know the answer can be argued that it’s nothing.) The dollar has value because a country is backing it, businesses use it, etc. It’s not just a medium of exchange. I believe this is a huge difference between BTC and Ethereum. ETH can run ICOs, apps, etc. What does BTC do? Just act as an exchange? There are plenty of long technical papers on the issue and differences between the two, but in short, that’s my 2 cents.
Fundamentally, it makes little sense for ETH to be going down based on the ETH scalability issue or ICO issue.
- Ethereum 2.0 is going to fix that and make ETH way better. Crypto, stocks, etc. are all based on what the future holds and apparently it’s not acting that way about ETH. The only reason I can think of is “because crypto”.
Ethereum futures. Ok, this is why I think it’s stupid that so many people are short ETH right now. (See below: ridiculous chart). Last year BTC went from 4.8k to 3k, and futures were announced around the same time. The CBOE is waiting on approval from the CFTC to launch ETH futures. What if ETH does the same move BTC did? That would put us around the ATHs for ETH, around $1,400. My $300 ETH position is going to seem awfully cheap if that happens.
You can see we are hitting mid 2017 levels before we had the massive bull run. I was surprised it went down this far with no rebound. While I don’t think it will go past $150, this is crypto.
For a large run-up, we have to break this trend line.
Weekly Chart: We are hitting oversold territory on RSI.
Daily: MACD did cross, but otherwise we haven’t been doing much.
RSI: Check out that massive divergence and oversold state. Ridiculous.
Check out this ETH/BTC chart. Super oversold and we are almost at not just 2017 levels but 2016 levels. That should tell it’s time for a rebound. Yeah, I have been saying it’s due to come back. I have been early on my calls, but I laddered in my positions in preparation.
I am hodling. These are my reasons why. I do not believe Ethereum is dead. It’s the second largest and second most used crypto out there.
Building amazing applications
The Ethereum platform is natively designed for the development and usage of smart contracts in a highly robust, secure, and easy manner. The smart contract powered applications have a globalized recognition as well as ownership of the property apart from having a great value in the market. Therefore the platform easily enables the Ethereum developers, in order to create a whole financial market, records of debts and liabilities are stored, and also the future trading is made automatic through a predefined instruction. In a nutshell, all the all the risk factors of decentralized applications would be eliminated if Ethereum succeeds as a value proposition.
No future of gas
It is generally observed that Ethereum asset, ETH has no actual value proposition as it is not being much concentrated upon by the official Ethereum organization itself. However, ethereum gas is the way in which, we pay transaction fees to the network.
The working mechanism of Ethereum gas can be perceived very easily through an illustration. Imagine that that four people are sharing a car which is a smart contract which needs to reach a particular destination. The driver of the smart contract or the car just need to add fuel to the car to make it run, this fuel is nothing but with ethereum gas. Practically, the fuel is utilized by the engine, but as in when compared to the Ethereum network there is actually no need of ethereum gas prices to run a smart contract. It is just a theoretical concept, therefore, there is an actual value proposition for ETH as gas. This might probably make Ethereum dead.
Eliminating the ethereum based fees
Imagine a network where the transaction fees are collected using the Ethereum gas. The intermediary Ethereum gas which the users pay to the network is just a conceptual abstraction. The users can also be the transaction fees directly to the minor in any cryptocurrency of their choice, the Ethereum is just an intermediary and common platform for everyone to pay the fees for their convenience.
We can explicitly specify the technical specifications of a particular miner with respect to a smart contract and their ethereum based fees can be debited by directly depositing the fees in the cryptocurrencies of their choice within a smart contract, and the smart contract would take care of everything else. This is probably another reason which would make Ethereum dead.
They are not able to prove Ethereum economic and abstraction and this will make Ethereum dead
The official organization behind Ethereum have come forward with 4 different explanation for the Ethereum’s value proposition, which turns out to be not much noteworthy enough.
Lack of software support for the network.
According to experts it is estimated that the software requirements are highly complex as well as unreliable as their native asset of ethereum is a bit different from the ERC 20 best tokens, therefore, especially added functionalities must be made available in the wallets in order to make both of them acceptable. The argument might render Ethereum dead.
Difficulty in the pricing of ethereum.
The market abstraction of ethereum is difficult due to the inevitable need of monitoring market prices. They need to predict future prices, in order to get the high return from the ethereum blockchain network.
The existence of smart contracts which is not linked to the tokens.
The smart contracts have the capability to initiate a transaction and pay the fees in any cryptocurrency token of their choice. The contracts can also be integrated with decentralized exchanges in order to fulfill the order books. However, not all the smart contracts are linked to the Ethereum based tokens.
The requirement of Ethereum for its Proof Of Stake.
Also, the Proof of stake algorithm with Ethereum network incorporates doesn’t actually require any kind of Ethereum and would probably make Ethereum dead.