Dubbed crypto winter, the longest bearish swing since the debut of Ethereum appears to be coming to an end as we enter the second quarter of 2019. Read on as we go over important technical price patterns and news that has driven the price of ETH this far.
Analyst Opinions
January 4, 2019: Ethereum Core Developers to Advance with Development of ASIC-Resistant PoW Algorithm
In a meeting held on the 4th of January, Ethereum (ETH) core developers concluded on a makeshift consensus towards the implementation of a new proof-of-work (PoW) algorithm that would boost the efficiency of GPU-based — as opposed to ASIC-based — mining on the network.
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The application of ASIC mining hardware in the cryptocurrency space has made it more challenging for GPU based setups to receive a reward on the networks.
Martin Holst Swende, the security lead, mentioned that development to the algorithms specifications has made it difficult for ASIC miners, resistant to accelerators tailored to enhance GPU-based setups as well as stabilizing the hash rates.
Upon evolving through the hybrid PoS-PoW Casper protocol, Ethereum was expected to eventually transition to PoS (Casper v2). Alongside sharding, that will later aim to mitigate the excessive energy consumption associated with PoW, issues with equal access to mining hardware, mining pool centralization, as well as providing an on-chain scaling solution.
Vitalik Buterin Rejected Allegations of Negative Security Issues on the Constantinople Hard Fork
On February 15, in a forum of major core developers, co-founder of Ethereum Vitalik Buterin denied allegations of adverse security implications prior to the release of the Constantinople hard fork.
The feature is named “Create2”, an Ethereum Improvement Proposal (EIP) EIP- 1014, which is meant to allow for synergy with nonexistent contracts on the blockchain, in particular addresses that do not yet exist on-chain but can be relied on to likely contain code.
February 28: Constantinople Upgrade
The long-awaited Ethereum’s Constantinople Upgrade was finally executed on February 28, 7:52 PM at block 7,280,000, after being postponed from January 16. The upgrade progressed with no technical problem as miners initiated the new software features in agreement.
Developer Adoption
Ethereum Core Developers double that of Bitcoin per month,
Electric Capital
Crypto asset management company, Electric Capital reported that Ethereum had the most developers working on its base protocol, aside from community project developers. This was published from their Medium post on March 7 ’19.
Code repositories, as pointed out in the report, is over 20000 and about 16 million commits, revealing an average 216 code contributing developers every month.
The second most active in terms of developer contribution is Bitcoin, with an average of 50 developers/month, followed by platforms such as EOS, Tron, and Cardano with over 25 average monthly developers.
Towards the last days of the first quarter, 28 March to be precise, in an interview on Bloomberg, experts mentioned that Ethereum is losing its developer advantage as developers switch to other projects.
A meager 28% of DApps users were on the Ethereum network, compared to 48% on EOS and 24% on Tron.
ETHUSD: Monthly
Following an approximate 80.44% bearish price decline from the bearish accumulation pattern signaled at the close of July 2018, the ETHUSD for the first time in thirteen months triggered a bullish accumulation pattern at the end of Q1. The formation of a bullish pattern such as this draws the attention of HODLERs as it indicates bullish sentiment. It also draws the attention of speculators to a second support level at $125.88, which is higher than the 13months low of $83.0.
ETHUSD: Weekly
An approach from the weekly time frame shed some light on the buildup of the monthly chart’s bullish accumulation pattern. A breakout of bearish accumulation was triggered during the last quarter of 2018, thereby ushering in possibilities of a bullish trend in the first quarter of 2019. Following a 23.6% retracement of the bullish breakout, the pair resumed the bullish campaign and later triggered a bullish accumulation pattern on 11 March ’19.
ETHUSD: Daily
A closer zoom to the daily chart shows a breakout of bearish accumulation on January 30 and February 08 2019, after a 32.0% bearish price decline. The price of Ether quickly skyrockets from both breakout points by 53.5% and 40.15% respectively.
On February 24 ’19, a rapid rise in opposite volatility sends the pair into a retracement by forming a dark cloud cover and bearish regular divergence. A bullish fakey pattern was also triggered on March 05 ’19, confirming an end to the price retracement and a continuation of the bullish trend, with support at 125.88.
ETHUSD: 4HR
From the above 4hour chart, a bearish divergence pattern is triggered and confirmed by a breakdown of bullish accumulation on February 24 ’19 04:00, sending the price of ETH crashing down by 24.2%. An opportunity to scale into extra short entry was presented on February 27 ’19 12:00.
At the last month of the quarter, the ETHUSD pair from the same 4hour time frame established an AB=CD harmonic pattern on 16 and 18 March ’19. The harmonic pattern was further reinforced by a breakdown of bullish accumulation.
Conclusion and Projection
The lower 1hour and 30minute charts displayed below, both show an increase in bullish sentiment with the bullish deep Crab harmonic pattern on the 30minute chart March 25 ’19 23:30, forcing an upsurge in the price of ETH, while the bearish three drives harmonic patterns could not stand the test of time.
By this, we look forward to furthering upswing in the price of ETH towards the 242.62 monthly resistance as the first target, and will reverse our bullish sentiment should price close below the 125.88 support on the same monthly time frame.
ETHUSD: 1HR
ETHUSD: 30 MIN
Featured image by Marco Verch
