Technical Analysis

ETH/USD Analysis – Aug 06, 2021

By LonghornFX Technical Analysis
Aug 6, 20213 min

Bullish Engulfing to Support Buying

ETH/USD was closed at $2827.52 after placing a high of $2843.32 and a low of $2531.58. ETH/USD rose for a second consecutive session on Thursday and reached above the $2800 level amid the launch of the long-awaited upgrade of the London hard fork. On Thursday, the most significant change and upgrade in Ethereum blockchain since 2015 went live and pushed the prices of ETH/USD higher. The new upgrade showed that the network was on its way to make an even bigger upgrade to reduce its energy usage by 99%. London hard-fork, the latest update in the world's most-used blockchain software, included a fee-reduction feature called EIP-1559.

According to tracking website data, only a few hours later, the fee cur eliminated about $2 million worth of its native cryptocurrency Ether, which put upward pressure on ETH/USD. The co-founder and creator of Ethereum, Vitalik Buterin, said 1559 was the most important part of the London upgrade. This upgrade was proof that the Ethereum ecosystem could make significant changes.

Ethereum blockchain has gone through about 11 updates, and London hard fork is the biggest game-changer among all. The latest London hard fork consists of five Ethereum Improvement Proposals (EIP), with each set of changes to the code. Out of five EIPs included in London hard fork, EIP-1559 is the one catching most of the market's attention. It is associated with the burning of coins and eventually casing a deflation of ETH, which will ultimately add to the value of ETH due to scarcity.

Furthermore, on Thursday, a precious metal firm Kitco Gold announced a gold-backed stable coin launch. Kitco announced a partnership with First Digital Trust, Tradewind Market, and an asset tokenization provider to launch the gold-backed ERC20 tokens called Kitco-gold (KGLD). One token will represent one true troy ounce of fine gold. These tokens were built on Ethereum blockchain, and ETH/USD prices moved higher after this news announcement and reached above the $2800 level for the first time in 2-months.

ETH/USD Intraday Technical Levels

Support Resistance

2624.96 2936.70

2422.40 3045.88

2313.22 3248.44

Pivot Point: 2734.14

ETH/USD - Technical Outlook

The ETH/USD is trading with a bullish bias at a 2,779 level on Friday. The second leading cryptocurrency has violated the double top resistance level of 2,691 level. Closing of candles above 2,691 level is exposing Ethereum price towards next resistance level of 2,862 level. The 50 periods simple moving average and the MACD is supporting a bullish trend in ETH/USD pair.

Ethereum's immediate support holds around 2,694 level and a breakout of this exposes its price towards 2,539 level. Therefore, ETH/USD bullish bias can stay strong above 2,690 level as the pair has closed a bullish engulfing candle on the 4-hour chart. All the best!


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