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October 3, 2022
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Ethereum Analysis: Indicators point to an increase to $ 2,000

Traders may be switching to decentralized exchanges to take advantage of opportunities.

With Ethereum remaining at $ 1,300, traders are expecting a likely visit of $ 2,000 in the future, a possible new all-time high, based on the following reasons.

Although Ethereum dropped to $ 1,040 on January 22 amid falling cryptocurrency prices that day, data from cryptocurrency exchanges suggests that there is an increasing outflow of Ether on the trading platforms. On January 23, exchanges had the lowest number of Ether reservations since November 2018. Some observers cited that the exit may be just an internal transfer made by an exchange, specifically Bitfinex, reported to Cointelegraph.

Still, it is also likely that the transfer is being facilitated from cryptocurrency exchanges to decentralized exchanges like Uniswap and Sushiswap, as evidenced by the increase in the total blocked amount across the decentralized financial sector, now totaling $ 25.47 billion according to DeFi Pulse. Traders may be taking advantage of the lucrative “agricultural production” opportunities at DeFi that cannot be found on more traditional and centralized exchanges.

As DeFi continues to grow and the use of automated market makers like Uniswap, transaction fees (called gas fees) also increase. As Ethereum transactions are processed in blocks (as in Bitcoin), participants who pay higher fees will be confirmed first, causing an increase in fees and, eventually, the price of the cryptocurrency. This is because more and more participants compete to get their transactions confirmed first.

Increasing the outflow of exchanges towards decentralized exchanges also means that the demand for Ethereum’s decreasing supply on exchanges will cause its price to increase. According to Coinalyze.net, Ethereum’s trading averaged $ 6.1 billion in daily volume last week, suggesting that many users continue to demand Ethereum, which most of them would likely withdraw from exchanges.

In a recent report, the Fundstrat Global Advisors He said he sees Ethereum as the best crypto venture / reward investment game, citing the growth in rates and the flourishing of the decentralized finance industry. The report also warns of risks, including a low-potential market and delays in the transition from blockchain to Ethereum 2.0.

Source: Ibtimes

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