Ethereum (ETHUSD) Weekly/Daily
Ethereum (ETHUSD) continued an early stage major bottoming effort this past week but remains below the psychologically key 150 whole figure level going into year end. Significantly, ETHUSD remains within a downchannel (on the daily chart) and is now back to April levels, with bears remaining in control until ETHUSD breaks above the same downchannel’s resistance line. Nevertheless, the weekly and daily RSI, Stochastics and MACD are bottomish. Before bulls get excited, they’ll want to see the weekly RSI, Stochastics and MACD decisively perk up, likely coinciding with a reclamation of the psychologically key 200 whole figure level. Note that the two spikes lower (on the daily chart) in April are specific to the Liquid ETHUSD market, due to insufficient liquidity, marketmaker and circuitbreaker support (specifically on this exchange market) and not a spike move down on ETHUSD (across other exchange markets). Hope you’ve enjoyed your Xmas holiday season so far. All the best in 2020!
Ethereum’s hard fork Istanbul took place Dec 8th, introducing privacy improvements and altering gas pricing. The next Ethereum fork Muir Glacier is scheduled for January 1st, 2020, addressing the “Ice Age difficulty bomb” ahead of a fork planned for Q2 2020 named Berlin. Ethereum Version 2.0 follows Berlin, moving Ethereum from the Proof of Work algorithm for validating transactions to Proof of Stake, making transactions faster and cheaper. Other scalability improvements including Sharding and possibly Layer 2 solutions like Plasma and Raiden are scheduled for 2020. Meanwhile, Ethereum developers have their work cut out for them as debate rages among developers and miners on mining difficulty and incentives, while newer blockchain competitors built for greater scalability attract more developers and funding. Although Ethereum is often portrayed as being highly decentralized, it should be remembered that Ethereum’s network is increasingly vulnerable as more than 60% of its nodes are now hosted within cloud networks like Amazon’s AWS, Google Cloud and Alibaba Cloud. Any decision by these Big Techs to push a competing cryptocurrency/blockchain could sideline these Ethereum nodes.
LedgerX and ErisX continue preparing to launch physically delivered Ethereum futures, with the CME appearing to be laying the ground work to follow suit, as it finetunes its Ethereum reference rate and index.
Tencent announced just before Xmas that it is forming a cryptocurrency research unit, likely assisting with the China digital Renminbi coin launch. Tencent-operated WeChat Pay has a 40% market share in China’s mobile payments industry, and 900 million users globally as of 2017 (with the majority in China as WeChat Pay is available only in a few countries outside of China).
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