Price analysis: Ethereum rebounds from 78.6% Fibonacci support
The Ethereum community was agitated by the news that the South Korean crypto exchange Upbit suffered a major hacking attack, which resulted in 342,000 Ethereum coins stolen, estimated to be worth almost $50 million. As expected, the crypto exchange suspended all crypto deposits and withdrawals and moved all assets offline.
Contrary to the rumours that spread initially, Taylor Monahan, founder and CEO of MyCrypto, said he doesn’t believe that the Upbit hacking incident was an “inside” job.
“The biggest thing that points to it not being an inside job is how the transactions were generated and signed. Upbit seems to follow a certain method with their programmatic transactions, and the ‘hack’ transaction in question used a different method. In addition, Upbit manually signed a transaction to secure their remaining ETH, after discovering the hack, and this too was generated differently than the ‘hack’ transaction,” he said.
Ethereum’s founder, Vitalik Buterin, has given his 2 cents on how to resolve the EOS CPU issues. The desired result is the improvement of the EOS network bandwidth. Accordingly, he offers a solution comprised of the following two steps:
- The EOS Network should implement sharding. This means that the whole blockchain should be divided into shards, or multiple interconnected parts. These shards will interact in a different manner.
- Each block producer on the network should be assigned to a random shard. Thus, the computational capacity of each block producer will be utilised effectively and only responsible for maintaining the shard.
Speaking about plans for Ethereum 2.0, Buterin said that he expects that the network should be able to process 3,000 transactions per second once all the changes are implemented. He also disclosed some of the new changes that are planned.
- Account abstraction, first-class smart contract wallets
- Casper proof of stake
- Resource-efficient light clients
- Optimistic rollup, 3000+ TPS post-Istanbul
- Non-interactive ZKPs for privacy and scalability
- Your staking will be rewarded
- Much more TPS post-sharding
It is expected that some of these changes will be implemented during the Istanbul update, which is currently expected to start on December 07.
Some media outlets reported on Monday that the difficulty bomb won't be activated after the Istanbul update. Accordingly, the development team agreed to an urgent hard fork shortly after the Istanbul update. At one point, participants discussed both the possibility of the complete removal of this mechanism and the postponement. In the end, they decided for the latter.
The upgrade will introduce six Ethereum Improvement Proposals (EIPs) on the network. Out of these six, at least 4 are introduced to bring the gas cost on the network down.
The ETH/USD price action is still trapped within a descending channel, however, it trades closer to the supporting line of the channel following a break of the horizontal support near the $154 handle.
As a result, the price action has moved from a “box”, defined by levels between $154 and $224, to levels below $150. As seen in the chart, ETH/USD has bounced off of 78.6% Fibonacci support. If the price action continues to drift lower, we expect again a reaction from the channel support line near the $130 mark. Again, 78.6% Fibonacci retracement line sits at $141.
“Given how Bitcoin looks at the moment, however, it appears that ETH/USD is poised for more downside. The following support would be at $100, which is a long way away,” commented Nik Patel, a popular cryptocurrency analyst.
“There does not appear to be much support left below $125, so it is vital that price is able to remain above here,” added Patel.
On the upside, the horizontal resistance, the previous support, is currently providing resistance to bulls. The second level of resistance can be seen in the context of the 100-DMA, currently trending at $178.40. The channel resistance comes just below the $200 mark.