Ethereum (ETH/USD) price has risen in the past ten consecutive days as sentiment in digital currencies improve. Ether rose to $2,400, which is substantially higher than this month’s low of $1,700.
London hard fork
After struggling in the past few months, Ethereum has been on an upward trend recently, bringing its total market capitalisation to more than $280 billion. The coin remains 45% below its all-time high of more than $4,000.
The ETH price has jumped because of several reasons. First, Bitcoin has managed to move from last week’s low of less than $30,000 to almost $40,000. This is notable since the two coins have a close correlation. Bitcoin has risen because of the dovish Fed and the fact that companies like Amazon, Tesla, SpaceX, and Facebook are supportive of the ecosystem.
Second, demand for Decentralized Finance (DeFi) products is rising. According to DeFi Pulse, the total value locked in the DeFi ecosystem has jumped to more than $67 billion. This trend is being led by DeFi majors like Aave, Maker, Curve Finance, and InstaDapp. The biggest DeFi projects are built using Ethereum’s network.
Further, Ethereum price is rising because of the ongoing software upgrade known as London. This upgrade will split the 13,000 new Ethers issued every day into three parts. The network will also reduce the base fees in a process known as burning. As a result, Ethers will become more scarce, which will lead to higher prices. Further, this trend will continue in the first quarter of 2020 as the networks moves to a proof-of-stake mechanism. In a note, Katie Talati of Arca said:
“It’s just going to make the overall user experience better, because, in theory, there should be fewer failed transactions. If the Ethereum ecosystem becomes stronger and larger, we will of course benefit from that, just like ordinary users.”
Ethereum price prediction
The daily chart shows that the Ethereum price formed a triple-bottom at $1,700 in May, June, and July. This is usually a very bullish case. Now, the coin has managed to move above the 25-day and 50-day moving average . It has also crossed the descending channel shown in blue. All these are bullish factors. Therefore, there is a possibility that the coin will gain momentum in August this year. If this happens, the next key level to watch is $3,000.