Notes from the Federal Reserve’s December FOMC meeting revealed that the financial institution intends to decrease its balance sheet and hike interest rates. The confirmation of these plans and the general hawkish stance of the Fed damped down the crypto market before the close of trading yesterday.
Ethereum and other top cryptocurrencies, including Bitcoin, dipped as the equities market suffered a similar pullback. The former is currently 9.83% down over the last 24 hours and has shed 6.87% over the last seven days as per market data. Here’s a look at other activities outside the market.
Ethereum is not ready for adoption, but development is 50% there
Ethereum co-founder Vitalik Buterin recently talked to the Bankless podcast in a two-hour episode where he debunked scalability issues. He brought to the fore a five-point roadmap for the cryptocurrency to succeed. The Ethereum co-founder noted that the six-year progress Ethereum has made thus far is 50% of the development.
Buterin argued that for Ethereum to achieve ultimate scalability and decentralization, it needed to become lighter and faster in blockchain data. He explained that at that point, it would become feasible for mass-scale adoption. The Russian-Canadian programmer concluded that for Ethereum to support mass adoption, the successful and complete implementation of layer 2.0 is necessary.
With the upgrade expected to conclude by mid-year, Buterin insisted that his ideal scenario for Ethereum isn’t one where he sacrifices decentralization for scalability. He also maintained his assertion that transactions shouldn’t cost anything more than 5 cents – Ethereum’s is at least 100 times that figure.
Market analysts foresee Ethereum price rising to $5,000
Ethereum reached a record high figure of $4,867 on November 10th last year but has caved alongside other crypto markets recently. However, according to an article published by Cointelegraph, yesterday there are several on-chain solid indicators that Ethereum will look to set another record high in the next few months with a prediction of $5,000 price point suggested.
Market analysts note that the token is getting rife for a rebound, as it is now around the trading region that has previously attracted buyers. The price is expected to rise as Ethereum deposits to exchanges for trading are projected to decline. Also, Ethereum will break just above its falling wedge resistance, and the government is predicted to retain cheap money flows to keep the stock market afloat.
Ethereum will succeed in dethroning Bitcoin, WeekInEth founder argues
Recent reports suggest that the second-most valuable token, Ethereum, became 140% more profitable than market giant Bitcoin. Ethereum outperformed Bitcoin throughout the four quarters as it enjoyed the NFT explosion and a scaled DeFi sector. Market analysts further claim that the crypto coin is already outperforming Bitcoin, so far, this year.
A more optimistic expert and WeekInEth founder Evan Van Ness quoted Fred Wilson to argue that Ethereum could finally topple Bitcoin for the top spot this year. He averred that the two markets would flip for several reasons, but key among them was the full implementation of Ethereum 2.0. The “Merge”, which will slash Ethereum’s power consumption by up to 99%, will bring in users in their millions; hence liquidity will sky, causing the market cap to grow parabolically.
Ethereum supply has dipped by 47% over the last two years
According to network behaviour analytics firm Santiment, the price of Ethereum enjoyed growth factors that pushed it up in recent months, but its supply ratio in centralized exchanges dropped by a significant 47%
Ethereum has recorded a more than 2400% rise in price over the last 24 months as holders moved tokens into cold wallets. However, it was not just Ethereum’s tokens that saw the shift. The supply of Bitcoin also declined, currently at 25% less the number of coins available for circulation over the last two years.
Ethereum (Ether) market performance
Ether price struggled to breach the $3,800 level on the last few days of 2021. The token, nonetheless, started the year modestly, going on an uptrend to set a week high of $3,877 on Tuesday, according to data from coinmarketcap. However, the ETH/USD pair faced rejection above $3,800 and slumped towards $3,400, bottoming out at $3,460.
Ethereum (ETH) trading chart
The price continued tanking as the broader cryptocurrency market reacted to bearish news from the Federal Reserve. Ether is currently trading at $3,459 – having slightly recovered from a four week-low of $3,432.90 recorded earlier today.
The current outlook is bearish, and if the price continues falling, Ethereum will look for immediate support at around $3,385. The token faces strong resistance at $3,800, where bears pose a huge stumbling block but clearing this level will likely pave the way for a comeback.
To learn more about this token visit our Investing in Ethereum guide.
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