Ethereum is up by 0.59% and, as of 10:30 AM GMT+3, was trading at $2316.74. Volumes were up, too, and stood at $7.520 billion. This makes Ethereum one of the few large-cap cryptocurrencies trading in the green today. A mix of fundamental factors and technical price factors drives this.
The fundamental reason driving Ethereum is the renewed push to make Ethereum scale better.
In a recent discussion on the future of Ethereum, Vitalik, the Ethereum Founder, called for optimizing Ethereum block sizes in line with the Ethereum roadmap now focused on rollups.
Vitalik Buterin highlighted five possible solutions to a future where Ethereum block sizes are fully optimized to handle higher data loads.
One solution that Buterin and other Ethereum developers are considering is to push up call data costs to 42 gwei up from the current 16.
Another solution that the Ethereum team has proposed is to increase the charges for calldata and lower the cost of opcodes. This proposal aims to cut overall gas costs while ensuring gas efficiency.
The current moves by the Ethereum dev teams follow a similar proposal that Vitalik Buterin made last month. He proposed increasing Ethereum gas limits to 40 million, an increase of 33%, to ensure that the network operates more efficiently.
Since scaling has been a major problem for Ethereum through the years, investors are keen on any moves that can help drive Ethereum to a more efficient future.
This optimism around scaling is why Ethereum is holding steady above $2k and sending signals of a potential upside breakout.
Ethereum Price Range Bound, But Volumes Rise: A Signal To A Bullish Breakout
Ethereum’s price indicates that buying volumes are rising, and the price is rallying toward resistance at $2684.08.
In the day chart, Ethereum has bounced off critical support at $2102.43, and buying volumes are rising. This indicates that optimism in Ethereum is on the rise despite the ETH token being range-bound.
If bulls can sustain this momentum and push Ethereum through $2684.08, it could easily hit $3000 or more in the short term.
However, if buyers lose momentum, two scenarios could play out. The first one is a continuation of the range-bound trading that has lasted more than 24 hours.
The second is a situation where bears break the $2102 support. Ethereum could be headed to prices below $2000 in such a case.
Ethereum Price Prediction: The Case For A Bullish Breakout
Of the scenarios that could play out, going by Ethereum’s price action, a bullish breakout looks most plausible. That’s because of the moves that Ethereum is making towards scaling.
This is a big deal because Ethereum has already won the market regarding security and decentralization. As such, now that multiple solutions are being proposed, developer confidence in Ethereum could go up, and that’s good for Ethereum’s price.
Similarly, Ethereum has started showing increased network activity, trading, and network usage by Dapps. This is evident in the increasing trading volumes on Ethereum, especially in the last 24 hours.
Ethereum is also likely to get support from Bitcoin, just like the rest of the market. Bitcoin is getting closer to halving, and the market expects it to rally like it did in the last bull run.
The signals are there already, with volumes rising at around $43k. As this momentum rises, Ethereum, alongside other altcoins, could follow suit. Ethereum particularly has an advantage because it is one of the best-known cryptocurrencies.
Also, the fact that Ethereum could get an ETF of its own makes it an attractive option for investors, especially now that a Bitcoin-driven rally could be underway.
BREAKING🚨: Standard Chartered predicts SEC approval for a spot Ethereum ETF in May.
— Bitinning (@bitinning) January 31, 2024
Overall, so much makes the case for an Ethereum upside breakout in the short term with the potential to make new all-time highs within the year.
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