Ethereum Struggling Below 3,345 – Brace for a Breakout

The ETH/USD closed at $3,228.54, after reaching a high of $3,346.21, and a low of $3,145.69. ETH/USD remained under heavy pressure throughout the trading session, closing the session at the same level at which it started. The prices of ETH/USD tried to rise during the first half of the session, but failed to hold their position, reversing their course amid the recent sell-off in the market.

ETH/USD remained under pressure on Monday, as the whole cryptocurrency market mood was depressed. The Ethereum blockchain implemented the London hard fork about 25 days ago, and a number of features were added to the network. One of the most anticipated changes was the EIP-1559, which made the ETH deflationary by burning a certain fraction of coins.

Since its inception, about 136,606 ETH has been burned, adding up to a total value of about $432 million. Ethereum is the second-largest cryptocurrency globally, with a market cap of $374 billion, which is 17.5% of the entire cryptocurrency market cap of $2.14 trillion. The recent upgrade to burning a fraction of coins should positively impact the ETH/USD prices, but on Monday, the crypto faced downward pressure, which could be attributed to the issue related to chain split and ETH gas fees, which doubled in value last week.The media criticized the amount of ETH that was burned, saying it added up to more than $400 million, which was comparable to the price that could be used to purchase a whole sports team in the NBA or NF, or a dozen NHL teams. Some suggest that $400 million could buy a trip into space or ten of the world’s most expensive automobiles. Given the value of $400 million, it could also be used to purchase about 2,000 medium-sized homes for $200K each.

ETH/USD faces selling pressure due to high gas fees, which are continuously making Ethereum less desirable, as the number of Ethereum-Killers and the competition in general are rising. Many blockchains provide a similar platform for DeFi and smart contracts, like Binance Smart Chain, Solana, Polkadot, Cardano and EOS, which, by comparison, provide their services at a lower cost, and developers are inclining more towards them. The rising number of competitors in the market is also weighing down the ETH prices, as the Ethereum development team is working on resolving the gas fee issue and continues to work on the main project of Ethereum 2.0.

The second most popular crypto pair, ETH/USD, is currently trading at around 3,329, with a neutral bias. The 3,240 level is providing immediate support, while the 3,340 level is providing resistance. A bullish crossover above 3,340 might push the price of ETH towards the 3,445 level. The Stochastic is at 59, indicating that the ETH/USD pair is on a bullish trend.

 

Support         Resistance
3,134.09          3,334.61
3,039.63          3,440.67
2,933.57           3,535.13

On the downside, the pair’s selling momentum is exposed until the 3,240 and 3,130 support levels. The pair is creating neutral candles within a limited trading range of 3,340 to 3,240, with the breakout from this area determining the future development of the ETH pair today. Good luck!