Ethereum price tumbles to $2,500 as scalability upgrade offers long-term potential
ETH is still grappling with a decline that started from the $2,720
Ethereum's price tumbled 8% as it failed to break through the 2700 key psychological level, erasing most of this week's gains.
Currently hovering around $2,500, the cryptocurrency is still grappling with a decline that started from the $2,720 and technical signals aren't looking promising in the short term.
A break below $2,600 and the resistance from the 100-day EMA suggests that bears are in control. The next line of defense? The upward trendline, which meets Ether's price, is around $2,410. Failure of bulls to reaccumulate longs at this level could accelerate Ethereum’s downward momentum.
Yet, beyond the immediate turbulence lies a potentially transformative force: Ethereum’s introduction of "blobs" through EIP-4844. Tim Robinson, Head of Crypto Research at BlueYard Capital, has called this upgrade “insanely bullish” for ETH in the long run.
Blobs are designed to enhance scalability by efficiently storing data off-chain. This has direct implications for Layer 2 solutions, which are crucial for reducing transaction fees while maintaining Ethereum’s security.
Robinson’s simulation indicates Ethereum could operate at 10,000 transactions per second (TPS), burn 6.5% of its total ETH supply annually, and have Layer 2 transactions cost as low as $0.06. These figures paint a highly deflationary picture for ETH and could boost its long-term value significantly.
Technical analysis supports bullish potential
For those looking beyond the short-term price action, there are long-term bullish indicators. Technical analysis reveals that Ethereum is currently declining within a larger uptrend. The 100 and 200-week EMAs are providing support for the bulls, and the price currently at the 100-week EMA could attract fresh buying interest, which could lead Ethereum out of its 12-week consolidation.
Yes, Ethereum’s short-term movements may be worrisome. But with scalability upgrades like blobs and a structurally bullish chart setup, the long-term fundamentals remain compelling.
Ethereum is facing waning interest as staking yields fall to 2.9% on Lido. The 2-year US Treasury yield at 4.1% highlights the growing competition.
