- Ethereum (ETH) dips further below $150 USD as bulls struggle to push it past resistance level at $157.00 USD.
- Exponential DeFi growth and the recent successful Istanbul hard fork are yet to stamp a mark on the growth.
- Can the Istanbul hard fork create buying pressure on ETH/USD pair?
ETH/USD headed towards bearish channel support
ETH/USD has dipped over 25% since the start of November – about 61% since hitting yearly highs of $370 USD – to trade at $144.45 USD, as at time of writing. The daily candle charts show a rectangular formation, signaling a possible drop further towards the $130 support levels for the pair. Notwithstanding, the volume traded on ETH/USD on Coinbase has been on a dip since mid-September, signaling bearish movements on the pair.
Following a bounce off the bearish channel resistance at $131.95 USD, the price of ETH saw a soar in demand pushing the largest altcoin to $157 USD as the native blockchain community readied for the Istanbul hard fork. Since that spike, bulls have struggled to set a steady uptrend as the price has remained rather a stagnant trading between $155.10 and $139.38 USD for the better part of December.
Slow ETH growth despite DeFi exponential growth
Decentralized Finance (DeFi) is the new ICO, at least in terms of growth, as the value of the industry tripled through 2019 – from $230 million to $690 million USD. While the DeFi products built on Ethereum continue to prosper in the past year or so, the value of Ethereum has continued to suffer since June, begging the question on whether the industry has a direct effect on the price.
The exponential growth in ETH locked in DeFi, which is expected to hit $5 billion USD in value by 2021, remains a key cornerstone to the growth of Ethereum. Many analysts maintain the slow growth in ETH price, about 5% in 2019 will soon start feeling the effects of a growing DeFi market. OKEx exchange tweeted,
BLOG: $ETH has been underperforming this year with less than 5% gain, but it's not the end of the world, yet. The rising of DeFi, network upgrades & enterprise involvement may set ETH to thrive.
— OKEx (@OKEx) December 11, 2019
However, with a Bitcoin DeFi product in line, intense competition between the two top blockchains looks set to ease the growth momentum on Ethereum DeFi value.
Despite a flat price action following Ethereum’s recent hard fork, Istanbul, developmental progress set by the proposal changes pictures a spur in Eth’s price in coming months. Could this set the ETHUSD bulls in motion?
Can the Istanbul hardfork spur ETH higher?
The Istanbul hardfork provides a gateway to the development of ETH 2.0 which will enhance privacy and set the blockchain to a proof of stake consensus algorithm. Such changes signals bullish movements on ETHUSD in the coming months given the staking frenzy currently happening across the industry.
1. Syncing a fullnode is nearly impossible. Nodes ensure the security of the network
2. PoS is the communism of blockchain. "It'll work this time"
3. Changes are implemented on a whim without proper consideration for the consequences (theDAO, Istanbul hardfork breaking contracts)
— Paul Côté (@legrosjunior) December 12, 2019
Currently, Istanbul is giving signals of being both a curse and a blessing to ETH’s price, and some analysts are skeptical of the fork impacting the price.