Ethereum price is on the cusp of a major bullish breakout as investors wait for the upcoming London hard fork and as the total value locked in Decentralized Finance (DeFi) rises. ETH is trading at $2,308, which is slightly below the important resistance at $2,390.
London hard fork ahead
Ethereum is currently a proof-of-work system, meaning that people mine it like Bitcoin. However, this model is often power-intensive and is unreliable. As a result, the developers behind the network decided to upgrade the system to a proof-of-stake consensus in 2020. This was known as Ethereum 2.0.
The upgrade had three key steps, including the Beacon Chain, Merge, and Shard Chains. The Beacon Chain is already live while Merge will happen in 2021. Shard Chain is expected to go live in 2023.
In June, the developers announced the testnet for the London Testnets. The upgrade went live on Ropstein on June 24. It was followed by Goerli on June 30 and Rinkeby on July 7. All this will be followed by the London hard fork set for later this month. Historically, Ethereum price tends to rise ahead of a major upgrade.
Indeed, some analysts believe that the migration to a proof-of-stake consensus mechanism will make Ethereum bigger than Bitcoin. Indeed, recently, the number of Ethereum wallets has risen above those of Bitcoin.
Ethereum price is also rising as the interest in DeFi resumes. Most DeFi platforms have seen a surge of total value locked (TVL) in the past few days. Precisely, the value has jumped from less than $47 billion to more than $55 billion.
Today, DeFi tokens are among the best performers in the crypto universe. Uniswap has jumped by more than 12% while Aave has risen by more than 20%. Similarly, Maker and PancakeSwap have jumped by more than 10%. Compound has jumped by more than 15%. Further, the total value locked in Synthetix has jumped to more than $1 billion. This is notable since Ethereum is the biggest platform for building these DeFi projects. So, what next for Ethereum price?
Ethereum price technical forecast
The four-hour chart shows that the ETH price has bounced back after it dropped to $1,697 two weeks ago. The coin is attempting to move above the 23.6% Fibonacci retracement level. Further, it has formed an ascending triangle pattern that is shown in green. In technical analysis, this pattern is usually a bullish sign.
The coin has also risen above the 25-day and 50-day moving average. Therefore, in my view, I suspect that Ether will soon break out higher to the 50% retracement level at $3,042. This price is about 32% above the current level. On the flip side, a drop below the support at $2,000 will invalidate this prediction.