Ether Price

Warning sign for ETH price? Ethereum volume profile is down 90% since March 2020

Ether’s 78% price recovery since July 2022 is at risk of exhaustion due to an unconvincing volume profile.

The price of Ethereum’s native token, Ether (ETH), has recovered 78% since June 2022. But this doesn’t guarantee further upside, particularly with declining trading volumes suggesting that the risk of a major correction is high.

Ether volume profile drops 90% since March 2020

A “volume profile” indicator displays trading activity across prices, with the blue indicating buying volume and the yellow indicating sell volume.

*Illustration of a volume profile bar. Source: TradingView*

In March 2020, when the market bottomed , Ether’s volume profile on a weekly chart showed about 160 million ETH trades across the $85–$270 price range. At the time, the selling volume was greater than the buying volume by around 4 million ETH.

But Ether buying volume regained momentum after ETH price rallied above $270 in July 2020.

Notably, between July 2020 and November 2020, the Ether volume profile displayed about 64.25 million ETH trades across the $270–$450 range, with buying volume exceeding selling volume by almost 1 million ETH.

*ETH/USD weekly price chart. Source: TradingView*

The price-volume trend remained largely synchronous with one another until November 2021, when ETH/USD reached its record high at around $4,950.

In other words, most traders purchased Ether as its price climbed, illustrating their confidence in the longevity of the bullish reversal that followed the March 2020 crash.

However, that confidence is missing in the 2023 Ether market rebound.

2022 ETH price bottom differs from two years ago

At first, the Ether volume profile at the beginning of it price recovery in June 2022 from $900 shows 12.50 million ETH trades, down more than 90% from March 2020.

But despite a 75% price recovery, fewer traders have been participating in Ether’s potential bottom this time around when compared with the beginning of the 2020 bull market.

What’s further concerning is the rising sell-volumes during the current ETH price rebound.

For instance, the red horizontal line in the daily chart below, dubbed the “point of control,” or POC — which represents the area with the most open trading positions — shows a net 8.21 million ETH volume of around $1,550, with sellers exceeding buyers by 170,000 ETH trades.

*ETH/USD daily price chart. Source: TradingView*

In other words, ETH’s ongoing price recovery might not have the legs it did in March 2020, especially when coupled with the overall volume profile decline over the past two years.

Most Ether investors are still in profit

More downside cues for Ether come from one of Ethereum’s widely monitored on-chain metrics that tracks the percentage of ETH’s circulating supply in profit.

As of March 6, about 65% of ETH was bought at a lower price. In other words, investors’ probability of securing profits remains high in the event of a significant price drop.

*Ether circulating supply in profit. Source: Glassnode*

Therefore, Ether price could see the real bottom if the supply in profit falls below 30% (green zone), which would reflect previous market cycles and the March 2020 bottom, as shown in the chart above.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Ethereum eyes 25% correction in March, but ETH price bulls have a silver lining

The Ethereum market has grown cautious around the long-awaited Shanghai upgrade, which will unlock 17.4 million ETH into circulation.

The price of Ethereum’s native token, Ether (ETH), shows a growing conflict among traders about the market direction for March. This uncertainty has resulted in ETH price consolidating inside a narrow sideways range between $1,600 and $1,700 since Feb. 15.

25% ETH price correction on the table in March

The uncertainty stems from Ethereum’s long-awaited Shanghai upgrade going live sometime in March.

Several analysts predict the upgrade, which will enable stakers to withdraw their vested tokens from Ethereum’s proof-of-stake (PoS) smart contract, will trigger a short-term sell-off event.

The Ethereum PoS smart contract has attracted more than 17.4 million ETH (~$28.35 billion at the current exchange rate) since its introduction in December 2020, per Etherscan.

In addition, Ether is finding it difficult to break above the technical resistance range. The Ethereum token has attempted to flip the $1,650–1,700 area to support multiple times since August 2022, as shown by the red bar in the chart below.

Interestingly, each failed breakout attempt has resulted in a strong pullback toward a common support line — a multimonth ascending trendline (black).

Therefore, if history is any indication, ETH’s next correction could potentially land its price near $1,250, down 25% from the current levels. Conversely, a break above $1,650–1,700 positions ETH for the $1,925–2,000 range (purple) as its next upside target.

Future ETH selloffs will be limited — data trackers

From an on-chain perspective, an extended Ether price crash appears less likely.

Notably, there’s been a massive drop in ETH supplies on exchanges since September 2022 — falling from around 30% to 11%. Theoretically, this reduces the immediate sell pressure as capital moves to the sidelines.

“The trend in crypto, particularly since September, has been quickly moving self-custody,” Santiment noted, adding:

“This trend picked up after the FTX collapse. Regardless, with both BTC and ETH around 5-year low exchange supplies, future sell-offs will be limited.“

In addition, data analytics firm CryptoQuant has reached a similar conclusion about potential Ether selloffs in the future, primarily in the wake of the Shanghai hard fork.

CryptoQuant notes that 60% of the staked ETH supply — about 10.3 million ETH — is currently at a loss. Meanwhile, Lido DAO, the largest Ethereum staking provider, holds 30% of all staked ETH at an average loss of $1,000, or 24%.

“Typically, selling pressure arises when participants have extreme profits, which is not the case for staked ETH currently,“ CryptoQuant wrote:

“Additionally, the most profitable staked ETH was staked less than a year ago and has not seen significant profit-taking events in the past.“

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Ethereum Shapella upgrade gets new date, making way for un-staking ETH

The upgrade is only for the Sepolia network, with a subsequent upgrade for the Goerli network to be introduced in March.

Ethereum core developer Tim Beiko announced the Shapella upgrade is scheduled for Feb. 28. The Shapella network upgrade will activate on the Sepolia network at epoch 56832.

Shanghai and Capella (Shapella) are the upcoming Ethereum hard fork names. Shanghai is the fork’s name on the execution layer client side, and Capella is the upgrade name on the consensus layer client side.

*Ethereum Sepolia upgrade schedule. Source: GitHub*

Some key Ethereum improvement proposal (EIP) changes on the execution layer include warm coinbase (not to be confused with the crypto exchange) and Beacon Chain push withdrawals. The push withdrawals will allow validator withdrawals from the Beacon Chain to the Ethereum Virtual Machine via a new “system-level” operation type. On the other hand, warm coinbase could be a game changer that reduces network fees for builders.

Coinbase is the name of the software that builders use to receive new tokens on the network. Every new platform transaction must interact with the coinbase software multiple times. The first interaction costs more as the software needs to “warm” up, with fees declining as the interactions increase. However, with the introduction of EIP-3651, the coinbase software will remain warm to begin with, requiring a lower gas fee to access it.

Major changes to the consensus layer include full and partial withdrawals for validators and independent state and block historical accumulators, replacing the original singular historical roots.

Partial withdrawal means validators can withdraw Ether (ETH) rewards in excess of 32 Ether and keep validating. If they want a full withdrawal, validators can fully exit, take all 32 Ether and rewards, and stop doing the work.

The upcoming upgrade would enable validators to withdraw their staked Ether (stETH) from the Beacon Chain to the execution layer. Moreover, the upgrade would bring changes to the execution and consensus layers, adding new features, making it a key upgrade following the Merge.

Stakers and non-stakers who operate nodes must, however, upgrade their nodes to the most recent Ethereum client versions to take advantage of the Sepolia upgrade. After the deployment of the Sepolia upgrade, the next step would be the release of the Shanghai upgrade on the Ethereum Goerli test network, expected to commence in March.

Ethereum price risks 20% correction amid SEC’s crackdown on crypto staking

Ethereum may experience a drop in user activity alongside ETH price, with crypto staking in the crosshairs of the SEC.

Ethereum’s native token, Ether (ETH), saw its worst daily performance of the year as the United States Securities and Exchange Commission (SEC) stopped Kraken, a cryptocurrency exchange, from offering crypto staking services.

On Feb. 9, Kraken agreed to pay $30 million to settle the SEC’s allegation that it broke securities rules by offering crypto staking services to U.S. retail investors.

In particular, the news pushed down the prices of many proof-of-stake (PoS) blockchain project tokens. Ethereum, which switched to a staking-based protocol in September 2022, also suffered.

On Feb. 9, ETH’s price plunged nearly 6.5% to around $1,525, the largest single-day decline since Dec. 16 of last year.

*ETH/USD daily price chart. Source: TradingView.com*

Will Ethereum staking survive the SEC crackdown?

The SEC’s crackdown on crypto staking begins as Ethereum awaits the release of its key network upgrade, dubbed Shanghai, in March.

The update will finally allow Ether validators — entities that have locked approximately $25.6 billion worth of ETH tokens in Ethereum’s PoS smart contract — to withdraw their assets alongside yield rewards.

As a result, multiple analysts, including Bitwise Asset Management’s chief investment officer, Matt Hougan, consider Shanghai a bullish event for Ether.

“Today, many investors who would like to stake ETH and earn yield are sitting on the sidelines. After all, most investment strategies can’t tolerate an indefinite lock-up,” wrote Hougan in his letter to investors in January, adding:

“So, most investors stay out of the market. But once that indefinite lock-up is removed, the percentage of investors willing to stake their ETH will explode.“

But doubts have been emerging about the future of crypto staking in the U.S., with Brian Armstrong, the CEO of Coinbase crypto exchange, fearing that the SEC would ban staking for retail investors in the future.

1/ We’re hearing rumors that the SEC would like to get rid of crypto staking in the U.S. for retail customers. I hope that’s not the case as I believe it would be a terrible path for the U.S. if that was allowed to happen.

— Brian Armstrong (@brian_armstrong) February 8, 2023

Moreover, some analysts argue that banning Ether-staking services will force users to move away from Ethereum.

Notably, Ethereum requires stakers to deposit 32 ETH (~$50,000) into its PoS smart contract to be a validator. As a result, retail investors often use third-party staking services that pool smaller amounts of ETH to enable validator status.

“If the SEC bans crypto staking for the public, then a majority of Ethereum validators will have to come down,” argues independent analyst Ripple Van Winkle, adding:

“Because you need 32 ETH to stake. Which means the ETH network is going to experience issues.“

ETH price sees bearish rejection

From a technical perspective, Ether price is positioned for a potential 20% price correction in February.

Notably, on the daily chart, ETH price has been undergoing a pullback move after testing its multimonth descending trendline as resistance. It now holds the 200-day exponential moving average (200-day EMA; the blue wave) near $1,525 as support.

Ether risks dropping below the 200-day EMA support wave owing to its negative market fundamentals. Such a scenario includes the next downside target at $1,200, which coincides with a multimonth ascending trendline support.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Ethereum price technicals hint at 35% gains versus Bitcoin in 2023

Ethereum market dominance has doubled since the lunch of its staking contract in December 2020 as ETH price eyes levels not seen in five years versus Bitcoin.

Ethereum’s native token, Ether (ETH), could grow by 35% versus Bitcoin (BTC) this year to hit 0.1 BTC for the first time since 2018 as it forms a classic bullish continuation pattern.

Ethereum price must first break key resistance

Dubbed an ascending triangle , the pattern forms when the price fluctuates inside a range defined by rising trendline support and horizontal trendline resistance. It typically resolves after the price breaks out in the direction of its previous trend.

On a weekly chart, the ETH/BTC pair has been painting an ascending pattern since May 2021. The Ethereum token eyes a breakout above the pattern’s horizontal trendline resistance near 0.0776 BTC. Breaking this level could then see the price rally by as much as the triangle’s maximum height.

In other words, the ETH/BTC pair could reach the next big resistance level at 0.1 BTC in 2023, or 35% from the current price levels.

*ETH/BTC weekly price chart. Source: TradingView*

Nonetheless, it is important to mention that ETH/BTC has attempted to break above the triangle’s resistance trendline eight times since May 2021. The attempts included two major breakouts in November 2021 and September 2022, which saw the pair rallying 14% and 9%, respectively.

Both rallies fizzled out inside the 0.082 to 0.085 BTC area, followed by extreme price corrections that took ETH/BTC back inside the triangle range. Given this multi-year hurdle, the pair could face stiff resistance inside the 0.082 to 0.085 BTC range, even if it breaks above the triangle.

Such a move would risk crashing ETH toward the triangle support, which coincides with its 50-week exponential moving average (50-week EMA), represented by the red line in the chart above, near 0.070 BTC, down nearly 6% from the current price levels.

ETH “deflation” narrative

Ether’s bullish setup versus Bitcoin appears as ETH dominance has doubled versus other crypto assets in the past few years.

Notably, ETH’s market capitalization has risen to nearly 20.5% of the entire crypto market valuation in January 2023, from about 10% in December 2020, when the Ethereum network started its transition from proof-of-work (PoW) to proof-of-stake (PoS) with the launch of a dedicated staking smart contract.

*ETH.D weekly performance chart. Source: TradingView*

Becoming a PoS blockchain has brought two key changes to Ethereum’s economy. First, users temporarily lock away a portion of their Ether holdings into Ethereum’s PoS smart contract to earn yield. And second, the Ethereum network has started burning some transaction fees.

Both changes have had a deflationary impact on overall supply. As a result, the Ethereum network now regularly produces fewer Ether tokens than are taken out of circulation, which theoretically makes ETH a “deflationary” asset.

*ETH supply change since the Ethereum PoS upgrade in September 2022. Source: UltraSound.Money*

The ETH/BTC price has grown nearly 250% since December 2020 despite still being down roughly 50% from its all-time highs witnessed in 2017.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Bitcoin vs Ethereum: Community split between capped supply and deflationary model

Bitcoin proponents argued that Ether’s monetary policy had changed at least seven times while BTC has seen zero changes.

Bitcoin (BTC) and Ether (ETH), the top two cryptocurrencies by market capitalization, have always been pitted against each other. With the start of the new year, the first debate has surfaced comparing BTC’s capped supply of 21 million to ETH’s deflationary supply, with disagreement over which of the two qualifies as sound money.

An Ethereum-focused Twitter user called ‘ultra sound money’ compared the supply issuance of both cryptocurrencies and suggested that “if capped-supply BTC is sound then decreasing-supply ETH is ultrasound.”

if capped-supply BTC is sound

decreasing-supply ETH is ultra sound pic.twitter.com/L2tsFzPQ7q

— ultra sound money (@ultrasoundmoney) January 15, 2023

The comparison between the two didn’t sit well with BTC proponents, who quickly pointed out that soundness comes from the credibility of the monetary policy and not an ever-changing one. Dan Held, a famous Bitcoin proponent, pointed out the flaw in the argument and noted that a constantly changing one has less credibility. He said:

“Time builds trust with humans, it’s not all about code. According to your logic, if we spun up another crypto with more deflation, that would be “sounder.”

Another Bitcoin proponent questioned the credibility of Ethereum’s monetary policy, reminding that the same monetary policy has “changed a least 11 times in its seven years of existence.” On the other hand, Bitcoin has not changed its monetary policy once.

*Ether’s historical projected issuance rate. Source: ethhub.io*

Ether became deflationary in August 2021 with the introduction of Ethereum improvement proposal-1559 (EIP-1559). The upgrade introduced a burn mechanism that automatically burns a portion of the transaction fee, decreasing the overall circulating supply of ETH.

In response to Alex Gladstein’s argument that “admins” can arbitrarily change Ethereum’s monetary policy, independent Ethereum educator Anthony Sassano claimed that every change on the Ethereum network had been approved by the thousands of node operators run by community members.

The term “admins” implies that there is a small group with superuser powers that can change things on Ethereum which is completely false and has been proven false many times.

You can believe what you want about the sound money vs ultra sound money debate.

— sassal.eth (@sassal0x) January 16, 2023

Leo Glisic, the founder of the Maitri network, said that ETH had become sound money now, but BTC won’t hit its cap until the year 2140.

Bitcoin has faced similar monetary changes and tweaking of the original code in the past. The most notable one came during 2017 when there was a growing demand for increasing the Bitcoin block size to accommodate more transactions per block and make it more scalable.

The majority of the Bitcoin community remained against making any changes to the original code of Satoshi Nakamoto. As a result, the Bitcoin network experienced a hard fork in 2017, leading to the formation of Bitcoin Cash (BCH), a cryptocurrency with a block size of 8 MB against BTC’s 1 MB. However, today, BCH has had very little on-chain development and is currently trading at a 97% price drop from its all-time high.

Ethereum’s Shanghai upgrade could supercharge liquid staking derivatives — Here’s how

Traders are contemplating what will happen to ETH price and staked Ether derivatives after the next network upgrade opens withdrawals for stakers.

The crypto market witnessed the DeFi summer of 2020, where decentralized finance applications like Compound and Uniswap turned Ether (ETH) and Bitcoin (BTC) into yield-bearing assets via yield farming and liquidity mining rewards. The price of Ether nearly doubled to $490 as the total liquidity across decentralized finance (DeFi) protocols quickly surged to $10 billion.

Toward the end of 2020 and early 2021, the COVID-19-induced quantitative easing across global markets was in full effect, causing a mega-bull run that lasted almost a year. During this time, Ether’s price increased nearly ten times to a peak above $4,800.

After the euphoric bullish phase ended, a painful cool-down journey was exacerbated by the UST-LUNA crash which began in early 2022. This took Ether’s price down to $800. A ray of hope eventually arrived in the third quarter as the market experienced a positive rally led by the Ethereum Merge narrative.

The shift to an environmentally-friendly proof-of-stake (PoS) consensus mechanism was a big step forward. The event also reduced Ether inflation post-merge. During a lead-up to the Merge on Sept. 15, 2021, ETH peaked at over $2,000. However, the bullish momentum faded quickly, turning the Merge into a buy-the-rumor and sell-the-news event.

A similar bullish opportunity could be brewing in Ether as the upcoming Shanghai upgrade scheduled for March 2023 grabs the market spotlight. The upgrade will finally enable withdrawals from Ethereum staking contracts, which are locked presently. The upgrade will significantly reduce the risk of staking ETH.

It will provide an opportunity for liquidity staking protocols to grow. The governance tokens of some of these protocols have jumped since the start of the new year as hype builds around.

There’s a possibility that the upgrade can push these tokens toward last year’s Merge highs. Moreover, Ethereum’s staking space is still in its early stages, providing a market opportunity for the growth of these protocols.

The percentage of staked Ether is low

Currently, 13.18% of Ether’s total supply is staked on the Beacon Chain, which is low compared to other PoS chains like Cosmos Hub with a staking ratio of 62.5%, Cardano with 71.8%, and Solana at 71.4%. The reason for Ethereum’s low staking ratio is that the Staked Ether (stETH) is locked in its current state, but this will change in March.

*Ethereum has the lowest staking ratio compared to other L1 blockchains. Source: Staking Rewards*

The upcoming Shanghai upgrade will include a code known as EIP 4895 that will allow Beacon Chain staked Ether withdrawals, enabling a 1:1 exchange of staked Ether for Ether. Ethereum’s staking ratio should reach parity with other leading PoS networks after this update. A significant portion of which will likely move to liquid staking protocols.

De-risking of liquid staking derivatives

Liquid staking protocols like Lido and Rocket Pool let Ether holders stake without running a validator node. Since Ether is pooled, a single user doesn’t have a minimum threshold of 32 ETH (worth around $40,000) for staking. People can stake fractions of Ether, reducing the entry barrier for staking.

The protocols also enable liquidity provision for staked assets, which would otherwise be locked in the staking contracts. The DeFi contracts give a derivative token (for instance, Lido’s stETH) in exchange for staked Ether on the proof-of-stake (PoS) network. A user can trade with stETH while earning yields from the staking contract.

As Ethereum’s staking ratio increases after March’s update, the use of liquidity staking protocols will likely increase with it. Currently, the liquid staking protocols account for 32.65% of the total staked Ether. Due to the benefits mentioned above, their market share should remain near or above current levels after the Shanghai upgrade.

The governance tokens of liquid staking protocols could also benefit from their increased locked value, similar to DeFi tokens, which benefited from a rise in total locked value (TVL) in the latest bull run.

How are LSD governance tokens performing ahead of Shanghai?

Lido DAO (LDO)

Lido DAO is the leader of the liquid staking space with higher annual yield and market share than other protocols. Lido commands 88.55% of the total Staked Ether in these protocols.

Let’s take the amount of staked Ether as a proxy for evaluating the protocol. We again find that Lido has the most competitive market capitalization to Staked Ether ratio.

The weak point of the project’s token economics is that LDO is a governance token. It doesn’t entitle holders to a share of the generated yield or fees. Moreover, the token has additional inflation from investor token unlocking until May this year.

*LDO 4-hour price chart. Source: TradingView*

Technically, the LDO token broke above the short-term resistance of around $1.17 with significant buying volume. Bulls will likely target $1.80, capitalizing on the hype around the Shanghai upgrade.

The token is heavily shorted in the futures market after the recent 26% rise in its price since Jan. 1. The funding rate for LDO perpetual swap turned negative with a large magnitude, providing an opportunity for a further uptrend in a short-squeeze. The current support levels for LDO are $1.17 and $1.

Rocket Pool (RPL)

Rocket Pool is similar to Lido, albeit smaller in size. The market capitalization to the stETH ratio of the platform is five times larger than Lido, which likely makes it overpriced.

Nevertheless, the RPL token has additional utility besides governance as an insurance token for users. Node operators stake RPL as insurance, where users receive the staked RPL in case of losses due to the operator’s fault.

The Ethereum Merge high of RPL in September 2021 was $34.30. Since the start of 2023, its price has increased by 10%, last trading at $22.40. If buyers are successful in building support above the $20 level, there’s a possibility that RPL can reach last year’s high of $30, which was attained around the Ethereum Merge.

Ankr (ANKR)

Ankr is a blockchain infrastructure provider which offers API endpoints and runs RPC nodes besides staking solutions. Similar to LDO, ANKR is only used for governance purposes.

The token’s price has stayed relatively flat over the last few days. The market capitalization to the staked Ether ratio of Ankr is on the higher side at par with Rocket Pool, which is a negative sign.

Still, if the hype around Shanghai upgrade increases, ANKR can reach August 2021 highs of $0.05. The recent breakdown level of $0.03 will act as resistance for buyers. Currently, the token is trading around $0.015.

Stakewise (SWISE)

Stakewise offers the highest staking yield of 4.43%. Its governance token is comparatively less inflated than RPL and ANKR in the market capitalization to Staked Ether ratio, making it cheaper than RPL and ANKR.

However, the token distribution is adversely skewed towards private investors and the founding team, which have 46.9% of SWISE’s total supply. According to data from Nansen, wallets identified as “smart money” have been slowly accumulating SWISE since April 2021.

*Smart wallet holdings of SWISE tokens. Source: Nansen*

The Ethereum Merge high for SWISE was $0.23, which will be the likely target for buyers. The support lies near 2022-lows around $0.07.

Shared Stake is flagged red because the protocol was suspected of an insider exploit, which caused a 95% decline in the token’s price in June 2021. The high staking return of the Shared Stake compared to others is also an eyebrow-raising detail to take note of. On the other hand, Cream Finance has discontinued its Ether staking service.

The upcoming Ethereum Shanghai upgrade provides an opportunity for the liquid staking space to grow. Lido DAO is the clear leader in this space with an optimum market price. The de-risking of ETH staking and hype around the event could translate to a series of rallies that could push the price of LDO and other liquid staking protocols back to their Merge highs from last year.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

5 altcoin projects that made a real difference in 2022

This year was tough on crypto prices, but ETH, LDO, MATIC, DAI and ATOM all made a positive impact on the industry.

Bitcoin (BTC), Ether (ETH) and the rest of the crypto market had a rough 2022 from a price perspective, but traders are hopeful that 2023 will include bullish developments that push prices higher.

Despite the marketwide downturn, a handful of altcoins continued to make a positive contribution to the crypto space and thanks to Ethereum, the term altcoin is no longer a derogatory term.

Let’s explore the top altcoins that made a difference over the past 12 months.

Ethereum fundamentals shone in 2022

Ether’s price hit a yearly high at $3,835 on Jan. 2 and has struggled to regain footing amid the bear market and other macro factors. The Ethereum network is the top project in 2022 not because of Ether’s price action, but for its fundamentals and for completing the long-awaited mainnet upgrade. The Ethereum merge was completed on Sept. 15, and while many feared the Merge to proof-of-stake (PoS) could cause issues, the transition was flawless.

The main advantage of PoS is that it is much more energy-efficient than proof-of-work (PoW), because it does not require expensive and energy-intensive hardware to validate transactions. This reduces usage costs for the end-user and makes it a more sustainable and scalable solution for Ethereum’s long-term growth. The Merge also reduced the Ethereum network’s energy consumption by over 99.9%.

Some analysts are bullish on Ether post-Merge due to its emissions schedule becoming deflationary. Although daily active users have increased for the network, emissions have remained inflationary and Ether price is still down from yearly highs.

In 2023, investors are hopeful that increased transactions on the network creates higher demand for Ether and that this translates to a boost in the altcoin’s price.

Lido (LDO) brought Ethereum network staking to the masses

Lido’s makes it easy for users to participate in Ethereum PoS as validators by providing a simple interface without them having to reach the high threshold of 32 ETH the network normally requires for staking.

Since launching, Lido has earned $158.8 million in fees from its staked Ether protocol. At the peak, Lido saw 823 daily active users on Sept. 17.

*Cumulative Lido fees and daily active users. Source: TokenTerminal*

With the Ethereum network’s Shanghai hard fork scheduled for March, Lido will have a busy first quarter and all the Ether staked on the platform will have the option of being withdrawn. Aztec Connect, the creator of Lido protocol, also recently secured a $100 million fundraising round to build an encrypted blockchain.

Polygon partnerships show long-term resiliency

Mass adoption requires traditional companies and brands to get involved in crypto. Polygon (MATIC) has a major focus on partnerships and some of the relationships developed in 2022 include Warner Music, JP Morgan, Instagram and Nubank, a neobank backed by Warren Buffett.

These partners use Polygon in various ways, including integrating the Polygon network into their infrastructure and using Polygon to offer distributed ledger technology (DLT) for their products and services.

Notable companies, including Cointelegraph, also chose to launch NFTs on Polygon. In addition to Cointelegraph, former President Donald Trump, Reddit, DJ Deadmau5 and Nike all launched NFT collections on Polygon.

Some traders expect a 200% upside swing from MATIC due to on-chain metrics showing traction and a bevy of future partnerships. Despite all of Polygon’s growth, the Ethereum network still intakes more fees.

*Daily fees comparing Polygon (Orange) and Ethereum (Green). Source: TokenTerminal*

Polygon’s focus on Web3’s core principles combined with their partnerships earned them a spot as a top altcoin project in 2022.

**Collect” below the illustration at the top of the page or** **follow this link**.

MakerDAO’s DAI proves resilient

In a year that saw algorithmic stablecoins de-peg and perish, Dai (DAI) has shown resilience. Unlike centralized stablecoins, DAI is a decentralized stablecoin that provides transparency, censorship resistance and the ability to operate outside traditional financial systems.

While DAI is not new to the crypto space, the decision to increase its exposure to low-risk assets such as Treasurys and corporate bonds earns them a spot as a top altcoin. According to an analysis from Sebastien Derivaux, a crypto scholar, this decision generated 75% of all DAI revenues ($600 million.)

Cosmos upgrades attract institutional investors’ attention

In 2022, Cosmos (ATOM) focused on solving the interoperability and communication challenges that exist between different blockchains. On Jan. 1, Cosmos had 74 active developers and this figure ha more than doubled, reaching a peak of 154 on Nov. 30.

In a year plagued with cross-chain casualties, Cosmos’ inter-blockchain communications protocol (IBC) has so far seemingly weathered the storm. The success caught the eye of Delphi Digital’s research arm and fund managers at VanEck.

*Cosmos fees and developer activity. Source: TokenTerminal*

Overall, Cosmos has the potential to be an important infrastructure layer for the crypto ecosystem, helping to facilitate the exchange of value and information between different blockchain networks and enabling a more interoperable future.

While 2022 is a year most crypto investors would like to forget, positive factors in mass adoption arose. The altcoins with a focus on building will continue to propel crypto’s future in 2023 and beyond.

The views, thoughts and opinions expressed here are the authors’ alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Ethereum ‘March 2020’ fractal hints at price bottom — But ETH bears predict 50% crash

Ethereum market analysts desperately search for the bottom but ETH price technicals aren’t excluding further downside below $700.

Ethereum’s native token, Ether (ETH), eyes a strong bullish reversal after losing 25% from its November high of $1,675, according to a bottom fractal spotted by independent market analyst Wolf.

Can Ethereum price co its March 2020 fractal?

Wolf compares Ethereum’s multi-month downtrend between May 2018 and March 2020 with a similar but relatively shorter correction after July 2022. If the move repeats, that means the price of Ether has bottomed in November 2022, according to the analyst, as shown below.

*ETH/USD 2019-20 and 2022 price performance comparison. Source: TradingView/Wolf*

Wolf draws cues from March 2020’s Ethereum price crash triggered by the Covid-19 pandemic — a black swan event. Similarly, ETH price was pushed down in November 2022 due to another black swan — the collapse of cryptocurrency exchange FTX.

But ETH/USD rebounded aggressively after the March 2020 crash, boosted by the Federal Reserve’s rate cuts that injected more money into the economy, part of which flowed into the crypto market.

Similarly, in November 2022, Ether’s modest recovery post-FTX “black swan” coincides with growing expectations of the Fed slowing its rate hikes. Thus, Ether has a good chance at repeating the March 2020 fractal to new monthly highs.

Moreover, independent market analyst, Cold Blood Shiller, sees a “clear breakout point” on Ethereum’s daily chart, namely its Awesome Oscillator (AO) and Relative Strength Index (RSI). Both indicators appear to have been flipping bullish recently, as shown below.

*ETH/USD daily price chart. Source: TradingView/Cold Blood Shiller*

Bears anticipate ETH losing another 50%

Nevertheless, Ether is currently down 75% from its record in November 2021 with the market seeing multiple bull traps since.

Market analyst Aditya Siddhartha Roy notes the possible formation of a similar bull trap in the current miniuptrend, which he argues risks exhaustion near a multi-month descending resistance trendline.

*ETH/USD daily price chart. Source: TradingView/Aditya Siddhartha Roy*

A decisive pullback from the descending trendline would push Ether toward $700, which may be a “possible bottom,” Roy explains.

Roy’s analysis aligns with Ethereum’s symmetrical triangle setup, best visible on its longer-timeframe chart shown below, whose technical downside target is around $675.

*ETH/USD three-day price chart. Source: TradingView*

In other words, the ETH/USD pair is still at risk of dropping another 50% in early 2023.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, and readers should conduct their own research when making a decision.

Ethereum Shanghai upgrade: EIP-3651 to cut gas fees for key network participants

Traders using builders to execute their complex trades could save a significant chunk of their gas fees as they no longer have to pay for failed transactions.

Ethereum’s Shanghai upgrade, the next major upgrade post Merge, is slated for the second half of 2023. The upgrade would be a key milestone as it would allow holders who have staked their Ether (ETH) for years to withdraw them systematically and make the network more scalable.

Apart from some of the major scalability upgrades, the key event would also tuck in a few minor Ethereum improvement proposals (EIPs), including EIP-3651, EIP-3855 and EIP-3860. Among all the upcoming improvement proposals, EIP-3651, called WARM Coinbase, could be a game changer that could reduce network fees for some of the key network participants called builders.

Coinbase here is the name of the software that builders use to receive new tokens on the network. Every new transaction on the platform needs to interact with the Coinbase software multiple times, The first interaction costs more as the software needs to “warm” up, and then the fees decline as the interactions increase. However, with the introduction of EIP-3651, the Coinbase software will remain warm to begin with, thus requiring a lower gas fee to access it.

Doing so would reduce fees for calls that make transfers to the COINBASE address, which is frequently used in systems like Flashbots (do they not have a Twitter???)

— timbeiko.eth (@TimBeiko) March 4, 2022

As the name suggests, builders are responsible for packaging Ethereum transactions into blocks, thus called block builders. These transactions are then forwarded to validators, who put them in the proper order in the blockchain.

These builders are paid by traders to arrange transactions in a block in a certain order, meaning traders pay higher gas fees to get their transactions validated earlier. Currently, Flashbots is the biggest builder in the Ethereum ecosystem accounting for 80% of relayed blocks.

While validators using builders will benefit the most from the upgrade, traders who use builders to execute their trades could also benefit, as they no longer have to pay transaction fees for failed trades. Traders are currently charged for failed transactions as well because miners need to confirm transactions to the chain whether they succeed or fail.

The testnet version for the Shanghai upgrade dubbed Shandong went live on Oct. 18, and Ethereum developers will be working on various implementations until September 2023.