Ethereum (ETH) is having an astounding rally in 2020, leaving Bitcoin in the dust with more than 250% increase in just a year — a feat nothing short of a miracle.
While many expected Bitcoin to be the frontrunner this year through its third Bitcoin halving, the emergence of decentralized finance (DeFi) became a dark horse that continues to leave many crypto bears and detractors dumbfounded.
Along with the 2020 ETH bull run is the increase of gas fees, partially caused by DeFi transactions. While the miners are making big profits from the event, the network scalability becomes an inevitable hindrance to the coin’s momentum.
#Ethereum miners earned over $500,000 USD in transaction fees in the past hour.
That is a new record high for a single hour (anomalous transaction fees earlier this year excluded).
— glassnode (@glassnode) September 1, 2020
Taking all of these things into consideration, is Ethereum still a good investment in 2020? Will DeFi continue to pump more money and hype to the network? What will happen to Ethereum in 2020?
Let us take a close look at the charts in this CoinQuora price analysis.
Crypto traders looking to buy ETH in the following days may opt to wait until a correction has taken place. As of the moment, ETH has undoubtedly broken through the $400 resistance level, and has even turned it into support. It will have an opportunity in the next coming days to test the $500 resistance, which many believe it will succeed at.
The upward trend is supported by observing ETH’s 50-day simple moving average (SMA, blue) and 30-day exponential moving average (EMA, purple). As far as the EMA is concerned, ETH is only going to have a minor correction as some sellers think it is selling time.
However, the correction will only happen for a couple of days before ETH begins to test the $500 resistance level. This will happen when it reaches the Fibonacci retracement levels $477.46 and $492.97. At the moment, the charts show that the asset has a high chance to hold between $430 and $460.
The relative strength index (RSI) also looks healthy, as ETH is being prevented from being overbought any further. This correction may last for a couple of days before traders start to buy again.
Bulls will have to maintain their aggressive dominance in the market. They will have to defend the $430-$460 territory and establish more support before they test the $500 key resistance level.
Traders will be looking closely at the above-mentioned Fibonacci retracement levels to confirm if the perceived bull run will materialize. Many are hopeful that it will, especially because many investors are pouring their money into DeFi projects.
Disclaimer: The views and opinions expressed in this article are solely the author’s and do not necessarily reflect the views of CoinQuora. No information in this article should be interpreted as investment advice. CoinQuora encourages all users to do their own research before investing in cryptocurrencies.