Fundamental Analysis Ethereum (ETH) October 2018
Cryptocurrency enthusiasts, traders and investors will be converging this week for the Ethereum’s Devcon IV taking place in Prague. A lot will be discussed about the development of the Ethereum network. Read on to get more details on the impact of the news releases compared to the technical price action on the daily chart.
A Focus on Previous and Upcoming Events in the Ethereum Community
Ethereum upcoming events:
- 30 Oct — Devcon IV in Prague
Ethereum past events:
- 19 Oct — Margin Trading and Funding on COBINHOOD
- 14 Oct — Constantinople upgrade (Cancelled)
- 10 Oct — San Francisco Blockchain Week
- 8 Sep — ETHIS in Hong Kong
- 7 Sep — Shanghai International Blockchain Week 2018
- 7 Sep — ETHBerlin
Shanghai International blockchain Week and ETHBerlin 7 September
The Shanghai International blockchain week which brought a lot of cryptocurrency millionaires and blockchain technology experts together, offered huge prospect for the Ether to gain some strength. On the other hand, the price chart triggered weak and low volatility bullish accumulation patterns at low bullish retracement of the bearish trend. The bullish accumulation pattern immediately failed to a breakdown upon EtheBerlin and Shanghai blockchain week.
San Francisco Blockchain Week 10 October
A confluence of events in the form of bearish accumulation price pattern and a bearish hidden divergence pattern was triggered on the closing date of the San Francisco Blockchain week, sending the price of Ethereum through a downward spiral.
Constantinople Upgrade 14 October
The Constantinople upgrade release date did not only lead to an increased volatility in the price of Ethereum upon release, but across major cryptocurrencies. As a matter of fact, Bitcoin experienced the highest volatility, as speculators, traders and investors alike dump their tether for the BTC. From the daily chart used for reference, the price established a bullish accumulation pattern close to the release date, which leads to the price jump we see. Unfortunately, the upgrade stalled at block 4,299,999 for about 2 hours an indication that Constantinople was not well activated by miners.
According to Afri Schoedon a developer at parity, chains on the network could not be synchronized because most testnet miners were not prepared to support Constantinople’s activation on Ropsten. Based on these issues, 17 attendees of a call, made a formal decision to delay the hard fork till early year 2019. As a result of this event, speculators confidence towards holding on to Ether changed as price closed bearish on October 17.
Margin Trading and Funding on COBINHOOD 19 October
Following the Constantinople upgrade, investors and speculators, did not picture it to take the smart contract launching platform into a new sustainable bullish trend, and as a result, they expressed this by triggering a breakdown of a bullish accumulation pattern on October 18 and 19, coinciding with the margin trading and funding on COBINHOOD exchange.
DevCon in Prague 30 October
If you followed our last article on the DevCon event, you’ll notice that we couldn’t give a specific outcome on how this would affect the exchange rate of the Ether. However, considering that it’s just a day to go and buyers have already shown weakness on their part to take the pair higher, we expect this conference to not have any impact be it positive or negative on the price of Ethereum. The price is expected to follow more of the technical setups displayed on the chart.
Potential Triggers for November and into December
In order for us to get a good picture of such long-term projections, we’ll have to take our view from a technical price action chart of the monthly and weekly time frames. Following the events listed above, we’ll observe that the major event for Ethereum is the Developers Conference in Prague taking place on the 30th of October. Considering that this event is taking place on the last day of the month of October, it coincides with technical analysis of the monthly chart.
Now, from a monthly chart perspective, a bearish closing month indicates a bearish accumulation, indicating a dominance of the bears in the market. Even though this may look like a great shorting opportunity, we should prepare for both long and short trades, owing to a fact that this bearish accumulation pattern is formed at the base of an existing bearish trend.
That said, entering a sell order at the opening price of November, we should be looking towards having our take profit target at 72.93 for a short-selling trade (62%), and 500.00 (156%) for a long buying trade. Again, the only condition to enter a long buy trade is in the event of a bullish breakout of the bearish accumulation pattern that should be formed upon bearish close of October.
Potential Risks for November and into December
The earlier mentioned bearish accumulation pattern presents risks for both bearish and bullish trade orders. For a short-selling trade, the Ethereum vs. USD should be taken with an equal risk of 62% translating to a stop loss target of $317.00. On the other hand, a long buy order should be entered with a risk of about 15.66% in the event of a bullish breakout.
Technological Adoption and ICOs on the Ethereum Network
Created in 2017, an ERC-20 token named Bitcoinereum simulates the Bitcoin mining mechanism on the Ethereum blockchain. The developers claim that users can mine the coin with no mining equipment as a requirement. The team at Bitcoinereum is inviting any interested persons in the open source community to come to review the Bitcoinereum source code.
Updates and Milestones Accomplished on the Ethereum Network
The ongoing DevCon4 conference taking place at the moment in Prague has got the EEA; Ethereum Enterprise Alliance announcing the release of its Enterprise Ethereum Client Specification V2 as well as Off-Chain Trusted Computer Specification V0.5. The specification is a development of common standards with the goal of ensuring developers write codes that enterprise customers find motivating.
Based on a report from Ethereum World News, there’s been a move by developers to hard fork Ethereum’s Ropsten testnet to the Constantinople upgrade. As mentioned earlier on in this article, the Constantinople upgrade could not move price higher due to an unfortunate stalling of the hard fork at block 4.299 million for 2hours.