Bitrabo Editorial
After a volatile start to the month, the price of Ethereum (ETH) has increased by 6% over the past week. A new protocol called “Ethscriptions” is expected to have a significant impact on ETH price movements in the coming weeks. The key question is whether the bullish buyers can hold the $1,650 support level.
On June 17th, developer Tom Lehman launched “Ethscriptions” – a protocol native to Ethereum that allows non-financial and arbitrary data to be written into the Ethereum blockchain. Currently, the protocol only supports images, but plans are in place to enable other file types under 96 kilobytes in the future.
The launch of Ethscriptions was relatively successful, with over 30,000 subscriptions created in the first 18 hours. Similar protocols like Bitcoin’s BRC-20 and Dogecoin’s DRC-20 have triggered significant spikes in transaction volumes and fees. Therefore, Ethscriptions has the potential to have a similar impact on Ethereum.
So, how will Ethscriptions affect ETH price movements in the coming weeks?
Ethereum Transaction Volume on a Steady Rise
On-chain data shows that the number of transactions on the Ethereum network has slightly increased over the past week. On June 13th, there were 928,540 ETH transactions, and by June 18th, this number had risen to 974,650.
This represents a 5% increase in network activity.
If Ethscriptions gains more attention and traction in the coming weeks, ETH transaction volumes are likely to rise further. Ordinal inscriptions, similar to those used in Bitcoin and Dogecoin, have been criticized for causing network congestion and fee spikes. However, Ethereum’s post-Merge state has a Fee-burn mechanism that reduces net issuance by more than 99%. This could inadvertently have a positive impact on ETH price. A significant spike in transaction volumes would result in more ETH coins being burned and taken out of circulation. The reduction in ETH supply could send bullish signals to strategic investors.
Altcoin Investors Are Mounting a Buy-Wall
Several high market cap altcoins have been delisted by crypto exchanges after being classified as securities by the US Securities and Exchange Commission. As a result, holders of these altcoins are now moving their capital towards Ethereum and Bitcoin.
However, investors looking to buy ETH want to enter at a favorable price. The order books of exchanges show that there are orders to purchase 111,030 ETH coins below the $1,600 mark, while only 85,200 tokens are available for sale in that price range.
This supply shortage of 25,830 ETH on exchanges could lead to increased competition among buyers, putting upward pressure on price.
In conclusion, the combination of rising transaction volumes and increased demand from altcoin investors could drive positive price movements for ETH in the coming weeks.
ETH Price Prediction: Another Push Toward $1,900
Considering the factors mentioned above, Ethereum’s price is likely to rise to $1,900. However, for the bulls to be confident in a positive price movement, ETH needs to surpass the initial resistance at $1,800.
According to IntoTheBlock’s data, there are 9.48 million investors who bought 6.44 million ETH at an average price of $1,857. If these investors decide to sell, it could trigger a pullback in price. But if ETH can break through the resistance zone, it could continue its upward momentum towards the $1,900 price target.
On the other hand, if ETH unexpectedly drops below the critical support zone of $1,700, it could trigger a negative price movement. However, there are 3.04 million investors who purchased 4.28 million ETH at a maximum price of $1,701, which could prevent a significant drop. But if the support level fails, ETH could retrace towards $1,530.
Disclaimer
This article is for informational purposes only and should not be considered financial or investment advice. Market conditions can change rapidly, and you should always conduct your own research and consult with a professional before making any financial decisions.