Ethereum has pared some of yesterday’s losses with a relatively strong 10.21% upside move. This came after yesterday’s near 20% drop. The slump occurred when it emerged that the Ethereum Improvement Proposal 1559 was being opposed by some major miners. Joining in this opposition was Ethermine, one of the three largest Ethereum mining pools and which forms a fifth of total hash power of the Ethereum network.
EIP-1559 was supposed to be an improvement on the Ethereum network to help it deal with the congestion and high fees that have occurred as a result of the huge growth of the decentralized finance ecosystem. It was also meant to prevent miners from prioritizing the transactions of higher-paying fee clients at the expense of those who choose to pay less.
Technical Levels to Watch
Ethereum was unable to break down the 1116.12 price support, which intersects the channel’s trend line. The bounce on this support has met resistance at the 1244.35 resistance. For the price to get to the 1359.76 resistance, it needs to break beyond 1244.35. The channel’s return line serves as the additional target to the upside for bulls.
On the flip side, a rejection and pullback at the current resistance presents a chance for a retest of 1116.12. If this area gives way, it leads to a breakdown of the channel and opens the door towards 981.48. Further decline on Ethereum sends the price towards 901.33, which is where a previous low was seen on 11 January.
Ethereum Daily Chart