ETH/USD Daily Chart
Ethereum’s surge to $415 seems to have been bolstered by these: ETH 2.0, the DeFi explosion, and the recently extended rally happening in the Altcoin market.
Anticipation for ETH 2.0 has been viewed as one of the key drivers steering ETH bullish momentum. The previous week, the Ethereum Foundation in partnership with ConsenSys and DeepWork Studio, released the official ETH2 Validator LaunchPad. The tool will allow users with 32 ETH to more easily stake their coins, earn rewards, and contribute to the Ethereum ecosystem.
In August, Ethereum developers expect to launch the final Testnet of ETH 2.0 called Medalla. When fully launched, ETH 2.0 would migrate Ethereum from proof-of-work (PoW) to proof-of-stake (PoS).
Kelvin Koh of Spartan Black stated recently that every phase of ETH 2.0 would strengthen Ethereum.
Another factor that contributed to Ethereum adoption and demand is the DeFi sector. Since mid-June, the total value locked in Decentralized Finance (DeFi) has skyrocketed. Compound’s COMP yield farming trend, for instance, contributed to the growing demand for DeFi.
This recent DeFi explosion led many DeFi-related cryptos to surge rapidly. However, in July, DeFi crypto saw a sell-off and profit taken to Ethereum and Bitcoin spurring a bull run for the duo consequently.
Ethereum and Bitcoin’s recent rallies as seen in the previous bull market always coincided with a drop-off in Altcoin prices. An inverse correlation was established between large-cap crypto and small-cap Altcoin resulting in a cycle of profit-taking to benefit ETH and BTC.
Ethereum surged more than 5% and breached the key $380 and $400 resistance to trade at $415. ETH price retreated sharply from $415, but technicals suggest uptrend remains intact above $340 support.
The strong rejection at the $415 level caused ETH price to shed more than $50. Support levels to pay attention to is $340, $305, and $300 levels.
Support at $340 level is expected to continue to hold as buyers focus on making the bullish case to $400 one more time. Resistance is expected at $380 but if broken, gains above $400 are likely to materialize.
Technically, Ethereum is in the hands of the bulls as seen with the RSI position above 70.