Ethereum, the second cryptocurrency, has become quite popular among investors, traders, enthusiasts, and even developers in Bitcoin’s wake.
So far, ETH has come second place behind Bitcoin in terms of popularity, market capitalization, and price.
What Is Ethereum?
For the sake of this introduction, we should refer to the cryptocurrency “Ethereum” as “ether.” This might go a long way to prevent confusion between Ethereum (the cryptocurrency) and Ethereum (the network or blockchain)
Ether is the native cryptocurrency of the Ethereum blockchain.
Put simply; Ether is the cryptocurrency that runs the ETH network.
Ether is the incentive this network pays its miners (now validators) for securing, executing, and processing transactions.
Using metaphors, it is more convenient to refer to Ether as the fuel (gas) that runs Ethereum. This is where the term “gas fees” come from.
Like Bitcoin, Ether runs on a blockchain. The only difference is that the Ethereum blockchain is a decentralized ledger that acts as a platform through which users can create decentralized applications (dapps).
While in the real world, Ether is used to pay for goods and services almost the same way as Bitcoin, Ether, at the bottom, also serves as an on-chain incentive or payment means for the computers that run and process transactions on its parent network.
Ethereum Drops Its Proof-of-Work Mechanism
Ethereum was originally a Proof-of-Work network at inception. This meant that the miners (or computers running the network) regularly competed with one another to solve a series of mathematical puzzles on the Ethereum network.
Whichever miner won these competitions received the exclusive rights to process transactions and recorded them on the blockchain. And in exchange for the “work” these miners did, the network minted (or created) new Ethereum tokens and credited the miner’s wallet.
This is where the term “Proof-of-Work” comes from.
However, in mid-September, the Ethereum network shifted from a Proof-of-Work mechanism to a Proof-of-Stake mechanism.
In Proof-of-Stake mechanisms, the network does not need miners anymore. It relies mostly on Validators who “lock” (or stake) a certain part of their holdings for a specified period.
The network chooses randomly selected validators and gives them the right to validate transactions. In return for “confirming” a transaction, the network rewards the validator with tokens.
This is where the term “Proof-Of-Stake” comes from.
According to projections, the move from a Proof-of-Work to a Proof-of-Stake mechanism was projected to cut the carbon emissions from burning fossil fuels by at least 90%. However, the carbon emissions from mining operations on the Ethereum network have dropped by more than 97%.
According to the CCRI, the annualized energy consumption of the Ethereum network has been reduced from a staggering 22,900,320 MWh to a negligible 2,601 MWh from September to October, a reduction that amounts almost to -99.98%.
Ethereum Price Analysis
At the time of writing, Ethereum has traded between $1,255 and $1,346. Price movement like this, considering the behavior of Ethereum over the last few days, indicates low volatility from a long-term perspective.
However, Ethereum has been volatile enough from a smaller perspective, as illustrated above on the hourly chart.
After bouncing off the lower support around $1,255 on 21 October, Ethereum has since reversed and now appears to be trending upwards for a retest of the $1,346 zone.
If Ethereum hits and breaks through the $1,340 support, it may trend upward to the $1,400 zone. However, a reversal may occur, sending the cryptocurrency back to a retest of the $1,255 zone.
Ethereum seems certain to break out from its symmetric triangle formation over the long term, as illustrated by the 4-hour chart above.
If the cryptocurrency breaks out of this formation to the upside, we may see a price rally, where Ethereum reclaims the $1,800 zone it sat at before the post-merge dip.
However, suppose Ethereum breaks the formation to the bottom and moves lower than the support at $1,200. The cryptocurrency may rally straight down to the $1,000 zone to continue the market’s current dip.
ETH Price Prediction 2022
Making accurate price predictions on markets as volatile as cryptocurrencies can be difficult. However, some analysts have managed to correctly predict the future of cryptocurrencies (Ethereum in particular).
Some of these analysts are Andrew Keys, former communications director at ConsenSys, who predicted ETH to be worth $1.5 in 2016. Barely two weeks after that, ETH hit this mark and began the long-term rally that ultimately brought it to the $1,400 mark.
ETH and the rest of the market are currently in a price dip. After falling more than 60% from its high of $4,850, the cryptocurrency is currently worth about $1,270 per token.
Over the long term, ETH is bearish and may likely reverse from the upper resistance of its channel. However, a breakout may happen at this point and push the price of ETH back to its previous highs.
ETH Price Prediction 2023
Most cryptocurrencies appear bullish over the long term (especially in 2023 – 2024), and ETH is no exception.
ETH is likely to rally upwards and reclaim its highs above the $4,000 mark in anticipation of the next Bitcoin halving expected to happen between 2023-2024.
Disclaimer: Voice of crypto aims to deliver accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.