- Ethereum price has gained over 8% today to push above the $600 mark for the first time in over 2 years
- Analysts are wary that the continuous delay in the Ethereum 2.0 launch may hurt its dominance in DeFi
- The support line around the $500 handle will now act as support while the next target for bulls is $640
Ethereum (ETH) price has broken out above the $600 mark for the first time since June 2018. The buyers will now aim to push for a close above this line as they attempt to force a bullish end to 2020.
Fundamental analysis: Delays in the rollout of Ethereum 2.0 may diminish its dominance in the DeFi sector
Crypto market experts expressed their concerns about Ethereum’s ability to keep up with the growth of other DeFi projects as the launch of Ethereum 2.0 keeps getting postponed. The long-anticipated rollout of Ethereum 2.0 will involve the shift to the Proof-of-Stake (PoS) which will substantially improve scalability and network performance.
Are you looking for fast-news, hot-tips and market analysis? Sign-up for the Invezz newsletter, today.
Earlier in November, the Ethereum 2.0 deposit contracts launched and enabled ETH owners to stake their holdings. The phase 0 of Ethereum 2.0, called Beacon Chain, will launch following a minimum contract deposit of 524,288 ETH.
The likely delay in the Beacon Chain rollout will also result in a further postponement of sharding and upcoming phases of ETH 2.0 launch. As the Ethereum serves as a platform to a number of DeFi tokens, these delays are likely to impact the overall DeFi market.
The decentralized finance sector experienced a boom during the summer this year, with many new tokens hitting historical highs a few months ago, however, the sector also went through a major correction later. Ethereum hosts around 80-90% of DeFi transactions and that’s why analysts believe the delays in ETH 2.0 launch could affect its dominance in the sector.
Since the new upgrade is expected to massively improve scalability, Ethereum 2.0 is also projected to significantly expand use cases in DApp and DeFi. As a result, the Ethereum 2.0 network is expected to provide a major boost to DApp and DeFi use cases.
“Eth2 is designed to optimize the network architecture without causing decentralization, security and scalability to suffer. Upgrades should enable Ethereum to scale to thousands of times its current capacity while remaining both secure and decentralized… which will be a boon for DeFi,” said Steven Becker, Chief Executive of DeFi project MakerDAO.
Technical analysis: ETH breaks out
Ethereum price has gained over 8% today to push above the $600 mark for the first time in over 2 years. The “equal legs” move – where the magnitude of a movement is equal to another movement – has signalled that last week’s push to $580 was supposed to be a short-term peak.
Ethereum daily chart (TradingView)
However, ETH buyers seem relentless in their bid to push the price action towards much higher levels. The support line around the $500 handle will now act as support and offer an opportunity to new buyers to jump into the market as buyers work towards their next target at $640.
ETH price broke out above $600 as buyers continue their relentless push higher. Elsewhere, the continuous delay in the launch of Ethereum 2.0 may significantly reduce the platform’s dominance in the DeFi sector, analysts say.