Bitcoin brings Ethereum near three-week high ahead of London hard fork

Ethereum, ETH, Bitcoin, BTC
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Key Ethereum takeaways:

  • Bitcoin rally triggered gains across the altcoin markets.
  • Ethereum, which rallied alongside, promises to bring further bullish sentiment on its hard fork euphoria.
  • Technicals on the ETH daily chart are skewed to the upside.

Yerevan (CoinChapter.com) – Bullish sentiment hit across the Ethereum (ETH) charts, matching steps with a similar upside move in the Bitcoin (BTC) market.

In detail, the BTC/USD exchange rate jumped 14 percent in the past 24 hours after traders assessed the rumor of Amazon preparing to adopt crypto payments.

The Bitcoin price rally sent a bullish wave across the altcoin market as well, triggering gains left and right. Cardano’s ADA jumped by 10 percent, DOGE advanced by 12 percent, while XRP gained 8.5 percent in a day.

The bullish wave hit Ethereum (ETH), initiating a 9.5 percent surge. The leading altcoin traded at $2,379 in the early European session Monday.

Upcoming London Fork

The much-anticipated 11th upgrade to the Ethereum blockchain, dubbed “London hard fork” is scheduled for August 4. It will bring significant advancements to the blockchain with five Ethereum Improvement Protocols (EIPs). The EIP 1559, in particular, gave fertile ground for the bullish outlook.

In detail, the protocol proposes to regulate Ethereum’s high transaction and gas fees issues. Meanwhile, not capping the total coin supply, EIP 1559 expects to introduce a fee-burning mechanism that removes ETH’s active supply. The protocol also takes a certain amount of ETH out of circulation by locking them in staking contracts.

The simulations of EIP 1559 suggest that the said mechanism could reduce the annual supply growth by 76 percent. While the protocol sounds promising, it does contain certain risks. The upgrade might have negative repercussions for ETH miners, changing reward dynamics.

Also read: ETH to deliver stronger returns than BTC in 2021

Ethereum technicals

Ehtereum charged 22 percent in a week and neared its three-week-high of $2,410 on July 7. The rumor of Amazon about to accept Bitcoin payments fueled the rally even further. As a result, the digital asset reached $2,379 on Monday, breaking out of the descending triangle formation.

Ethereum traded in a descending triangle formation. Source: ETHUSD on TradingView.com
Ethereum traded in a descending triangle formation. Source: ETHUSD on TradingView.com

The descending trendline forms by connecting lowering highs and prevents sharp breakouts. The horizontal trendline of the triangle provides support. The descending triangle is generally a continuation pattern but can also indicate possible reversals. Ethereum managed to break the pattern on July 24, continuing the bullish momentum.

Furthermore, the cryptocurrency has kept above the 50-day simple moving average (SMA-50: red wave on the chart above) for the past two sessions. Therefore, the SMA-50 could provide additional support in case the price corrects downward.

The 20-day exponential moving average (EMA-20: blue wave) on the ETH daily chart slightly corrected its trajectory. Instead of moving sideways, the wave adopted an upward movement, hinting at a possible golden cross between EMA-20 and SMA-50.

In detail, the golden cross formation occurs when a short-term MA crosses above a long-term MA after a bearish phase. Thus, the golden cross indicates a bullish cycle ahead, with further gains. The trading volumes on the ETH daily chart have also declined in the past two weeks, which is a bullish indicator, pointing at the reluctance of traders to exchange their ETH coins for other cryptos or fiat currencies.

Also read: Ethereum pumps 16% as Elon Musk claims he owns ETH; what’s next?

Final thoughts

The ubiquitous recovery across the crypto market planted green candles on the Ehtereum daily chart following the Bitcoin rally. The alpha altcoin enjoyed a 9.5 percent gain in 24 hours, atop the 24 percent surge since July 19.

The upcoming London hard fork has fueled the growing interest in the second-largest digital currency for quite some time now. The release is scheduled for August 4. Should the rally continue, ETH could benefit from a golden cross and beat its three-week high value of $2,410.

Many analysts on social media have voiced their predictions for Ethereum. KALEO sees the price growing to $6,000 and beyond by the end of the year.

Trading Tank points out the high RSI (relative strength index) level on the four-hour chart, pointing out that the price could reach $2,600.

Also read: Sub $18K Ethereum could douse all bullish ETH hopes, but there’s a silver lining

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