The second largest coin with a market value registered at $42.7 billion, Ethereum slipped below the trendline on July 30 and quickly dropped down to the critical support at $404.99.
Currently, the trend is moving towards bearish. However, the price has recovered from Wednesday’s low of $407. On the downside, any break of the $404.99 line can result in a fall to the next support at $358. Once the price drops below $400, until $358 there is no support level, this will mark the lowest price in 2018.
At the time of writing, Ethereum was seen trading at $414 with a market cap $41.8 billion.
Looking at the chart of ETH/USD, a bearish trend was formed once the pair broke the $460.00 support. Later, it broke the $445.00 support and dropped further. Currently, the price is trading at $412.
The price traded as low as $412.04 and is currently recovering higher. Ether’s price is faced with many obstacles near the $425.00 and $430.00 levels. However, the chances of heading north is very limited for the cryptocurrency.
Scalability obstructing roll out of Ethereum Web 3.0
Ethereum’s Co-founder, Joseph Lubin revealed that with the fundamental “layer one” in the Ethereum ecosystem is established now, 2018 will see “layer two” systems ramify and develop completely. He revealed this during a speech at the Rise conference in Hong Kong on July 10.
Scalability issues have been restricting Etherum since its inception. Etherum is has been handling 14 transactions per second whereas Visa’s transaction rate is 24,000 per second. This lead to congestion of networks. One of the most popular DApps, Cryptokitties, infamously crashed the network last year.
The second generation cryptocurrency is preparing to change the protocol from Ethereum Metropolis version 3.0 to version 3.1, Constantinople, by October. The initiative will lead to more efficient transactions and reduction in the cost of transactions.
Numerous scaling solutions are in the process, including sharding the network and a Layer 2 solution called Plasma. Scaling issue should be fixed first so as to upgrade to ‘Blockchain 2.0.’
Ethereum’s prime priorities are Sharding and migration from a proof-of-work protocol to proof-of-stake. Two goals are merged together into one. PoS Casper protocol is slated for 2019 and sharding will be implemented in two phases over 2020 and 2021, according to Ethereum researcher Justin Drake.
The migration will be carried out during the “Ethereum Ice Age”– a period in which the PoW mining difficulty is considerably increased to a target where it becomes impossible to mine and is expected to begin in 2020.
In addition to this, Ethereum is in the process of switching to a PoS protocol before ASIC chips overwhelm the hash rate of the network, making it vulnerable to attacks.