Ethereum's 0.65% Price Dip to $1,649.41: Key Insights for September 19, 2023

Ethereum, the second-largest cryptocurrency by market capitalization, saw a slight 0.65% price decline over the past 24 hours. As of September 19, 2023, Ethereum is trading at $1,649.41, down from $1,659.27 yesterday. However, Ethereum remains in an overall positive trend, up 2.56% over the past week.

After reaching an all-time high of $4,891 on November 16, 2021, Ethereum has seen a significant 66% correction as part of the broader bear market. The latest dip comes following a period of rangebound trading between $1,600 and $1,700 throughout September. While negative in the short term, this consolidation sets the stage for Ethereum's next potential breakout.

With a market capitalization of $198.05 billion, Ethereum continues to hold strong as the second-largest cryptocurrency behind Bitcoin. Over $3 billion worth of ETH was traded in the past 24 hours, making it one of the most liquid crypto assets.

Key Support and Resistance Levels

On the daily chart, Ethereum is testing support around $1,600 where it has bounced several times since mid-August. This aligns with the 21-day moving average, which has provided dynamic support throughout the recent consolidation.

Below this, the psychological $1,500 level marks the next key support zone, as Ethereum has historically found buying interest around round numbers.

On the upside, initial resistance comes in around $1,750 which capped upside moves several times in September. Above that, the 50-day moving average near $1,800 marks the next test. A daily close above the 50-DMA could signal a bullish breakout from the current range.

Network Activity Remains Strong

Despite the price consolidation, Ethereum's network activity and fundamentals remain strong. The number of active Ethereum addresses recently hit a 4-month high above 465,000 as more participants are using ETH and interacting with Ethereum-based dApps.

Additionally, total value locked in DeFi protocols on Ethereum stands at $23 billion. While down from its peak above $180 billion, this shows that Ethereum remains the dominant blockchain for decentralized finance.

Ethereum also maintains its lead in NFT trading activity, accounting for over 97% of transactions according to CryptoSlam data. Major brands continue launching high-profile NFT drops and collections on Ethereum, further cementing its position as the go-to network for non-fungible tokens.

The Merge Catalyzes Transition to Proof-of-Stake

The completion of The Merge on September 15 stands out as a monumental milestone for Ethereum. This transitioned Ethereum from an energy-intensive proof-of-work consensus mechanism to a more efficient proof-of-stake system.

By reducing Ethereum's carbon footprint by over 99%, The Merge paves the way for further scaling upgrades like sharding. It also stops the issuance of new ETH, turning Ethereum into a deflationary asset as more coins are burned through transactions than issued in block rewards.

While The Merge itself is non-event for price action, it is a huge technological achievement that bolsters Ethereum's narrative and use cases long-term. Reduced selling pressure from miners is also positive for price appreciation.

Price Prediction for the Remainder of 2023

Given the strong technical support and on-chain activity, I anticipate Ethereum will break out from its current consolidation in Q4 2023 as macro conditions improve. The next major resistance level around $2,000 seems like a realistic target in the coming months.

Looking ahead to 2023, Ethereum has potential to regain some of the losses from 2022. As developers build upon the foundation established by The Merge, Ethereum is well-positioned for strong growth next year.

Key factors that could boost Ethereum's price in 2023 include a resurgence of NFTs and DeFi, retail and institutional adoption, and progress on scaling efforts like sharding. With wider crypto market capitalization expanding, Ethereum could approach its former all-time high by late 2023 in a bullish scenario.

Does Ethereum have the fundamentals to reclaim the #1 spot from Bitcoin?

As the first major crypto asset, Bitcoin still maintains an advantage in terms of name recognition and narrative as "digital gold". However, Ethereum has several key fundamentals that could help it challenge Bitcoin's dominance long-term:

  • Utility: Ethereum powers a range of real-world decentralized applications from DeFi to NFTs and metaverses that drive organic demand for ETH. Bitcoin lacks this practical utility.
  • Development: Ethereum has a robust community of builders and the Ethereum Foundation directing improvements. Planned upgrades will further expand functionality.
  • Institutional adoption: Ethereum is gaining traction with institutions like JPMorgan rolling out services on Ethereum. The ability to build financial products leads more big money to ETH.

While Bitcoin will likely stay #1 for now, Ethereum's utility, development, and adoption place it in a strong position to eventually overtake Bitcoin by market cap in the years ahead.

What key factors could drive Ethereum to new all-time highs?

Here are the most important factors that could propel Ethereum's price to new record levels above its current all-time high of $4,891:

  • Renewed retail interest, as seen in early 2021. Major price gains often coincide with influxes of new crypto investors getting exposure to Ethereum.
  • Launchpad of a viral dApp or NFT project. History has shown the power of decentralized apps to drive hype cycles and bull runs for Ethereum.
  • Significant corporate and institutional adoption from the likes of JPMorgan, Mastercard, etc. validating Ethereum for business use cases and investing.
  • Major country adopting ETH as legal tender or allowing Ethereum products/services. Would showcase real-world utility.
  • Game-changing improvements through sharding and other Layer 2 scaling solutions that exponentially increase transaction capacity.

While unpredictable and often irrational, crypto markets respond well to narratives and milestones. Combinations of the above factors could create the perfect conditions to propel Ethereum to new highs.

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