Ethereum surpassed the $2,500 mark ahead of a highly anticipated network upgrade this week. The second-largest cryptocurrency increased within the range of its ascending price channel and reached as high as $2,700 on Wednesday. It dropped briefly in value after breaking past its 100-day moving average (MA), however, this loss was recouped swiftly and at the time of writing Ether was changing hands at $2,718.60.
Shortly after Ether’s price breached the 100-day MA, the currency declined slightly till it found support at $2,460. But ETH overcame this temporary retracement and rebounded to over $2.7K quickly. Its next resistance lies at $2,890 and if Ether breaks this, it might take on the $3,000 mark.
At current prices, Ethereum’s first resistance is at $2,460. If it drops below this level, it could find support at $2400, $2320, and $2200 (20-day MA).
For the past two months, the altcoin leader was consolidating within a triangle pattern, which was challenged on Sunday as ETH surged above its 50-day MA. After breaking that formation, Ether continued to push ahead and crossed the 100-day MA at 0.064 Bitcoin (BTC) until it reached 0.068 BTC.
Unsurprisingly, the recent rally has boosted Ethereum’s market capitalization, which stands at over $315 billion following an 8.22% gain. According to CoinMarketCap, the currency’s trade volume has also increased by 8.31% in the last 24 hours, indicating a spike in interest before the major network upgrade.
The London hard fork is a significant update to the Ethereum network, containing five new Ethereum Improvement Proposals (EIPs) -- which will remain relevant till the permanent ETH 2.0 update. The term “hard fork” refers to backward-incompatible changes, which means that everyone connected to Ethereum will have to upgrade to London.
EIP-1559 is the most exciting part of the upcoming changes. This proposal aims to scale Ethereum while reducing the cost of transactions. It proposes a base fee that will track gas costs across the network to ensure that users receive accurate predictions of gas fees. However, the proposal has sparked a debate in the network’s mining community about the potential reduction in their profits. US-based crypto miner Compass estimates that the upgrade could result in a 20%-30% decline in mining revenues because a portion of the transactional fees will be burnt.