Bulls regain control of the crypto market for the short term. Ethereum (ETH) price again went out to seek USD 250, the most relevant immediate resistance. Each attempt makes her weaker, though it looks like she’ll be through soon, supported by the DeFi environment growing exponentially.
DeFi’s influence on Ethereum
For many, the development and adoption of decentralized finance (DeFi) is and will be the primary catalyst for Ethereum’s price rise.
Ethereum is one of the crypto that has generated the best profits so far this year, and even helped the largest crypto seek recent highs.
Much of this success is due to the high activity of its chain, mainly driven by DeFi development. Remembering that these work on the Ethereum Blockchain through smart contracts.
DeFi projects doubled from the start of the year, while Ethereum’s price is still below its 2020 peak.
The number of users of decentralized finance also peaked during the current year. The foundations are well laid for the healthy growth of this ecosystem.
The total blocked value of DeFi is equivalent to USD 1.58 billion, and just 10 days ago the parabolic increase in this figure began.
Investment fund manager indicates that decentralized finance will drive ETH capitalization to the 1st trillion
Joseph Todarofund manager Block Town Capital, ensures that just as in 2017 the ICOs boosted the capitalization of ETH towards the 100,000 million dollars, in the cycle we are living with the DeFi development, the next objective is the 1st trillion dollars.
In 2017 Ethereum price peaked at $ 1,400. With a capitalization of $ 1 trillion, as Joseph predicts, the price will be more than $ 9,000. The current $ 250 is irrelevant if we take this prediction into account.
“In 2017, ICOs helped push ETH beyond $ 100 billion in market capitalization. In the next cycle, DeFi is likely to help push ETH to $ 1 trillion of market cap” Comment via Teitter Joseph Todaro (@JosephTodaro_) June 16, 2020.
The crypto winter crash in 2018 was mainly triggered by the bursting of the ICOs bubble, labeled scams. However, in this new cycle, the growth of capitalization will be caused in a much healthier way, backed by high activity in the ETH network, with development that does not stop growing.
Ethereum 2.0 released
In the short and medium term, there is still a relevant barrier, which may be holding back the price of an exponential appreciation. From a technical point of view, it is around USD 300.
However, there is one factor that could trigger a volatile leak to the upside, and that is the release of the 2.0 ETH network update.
As not everything is pink, the great activity on the Ethereum network, a product of the DeFi development, is causing congestion in the chain.
As a solution, the update that will probably come this 2020, will increase its scalability, which together with the exponential development and adoption that decentralized finances are experiencing, will be the perfect scenario for a great positivism in the ecosystem, and the trigger to overcome the $ 300.
Technical analysis of the ETH / USDT chart
As this publication is being written, the bulls are in temporary control, after they returned yesterday and began an upward transition of the short-term trend.
The $ 250 barrier is the most important to overcome if buyers want to make good profits, and this may be the definitive attempt. Generally, when resistances are repeatedly tested, they lose strength and end up being crossed.
After yesterday’s gains, today the price is down, but the next upside might soon begin.
The 8-EMA and 18-day SMA moving averages are cross-ascending, and the 200-day SMA is below price.
The odds are in favor of an escape to the 2020 highs, near $ 280.
As I comment, there is still a major barrier to resuming the long-term uptrend, and it is close to $ 300.
As the price develops, we will be updating the information. This way we can predict more accurately if that level could be exceeded in the next days or weeks.
All our publications are for informational purposes, so they should not be accepted as investment advice under any circumstances.