EIP-1559 Breathes New Life into Ethereum

IN THIS ISSUE

Analysis by @RandomTask555

You can feel the bullishness seeping back into the market this week in the wake of another large crypto investment, this time from a publicly-traded company in China. A company named Meitu with a marketcap of $12 Billion has purchased $40,000,000 worth of Bitcoin & Ethereum.

Their board of directors has approved up to $100m of their cash reserves for this endeavor so we may hear more from them in the coming weeks. This proves, yet again, that there are MANY potential investors out there who are simply waiting for dips to make their entry into the growing crypto economy.

Late last week, a timeline for EIP-1559 emerged that suggests we could see a protocol change for Ethereum sometime in July 2021. The proposed changes would smooth out the fee pricing model, making it more efficient, reliable, and user-friendly.

By implementing a “fee burning” mechanism it would in effect, reduce the inflation rate and thus, the supply, of Ethereum. Not all miners are a fan of this proposed change, however. Many have voted against it, but it appears it will go ahead anyway.

We can expect to witness some dramas unfold in the coming months as the event draws nearer. For a full breakdown of what EIP-1559 proposes to do, you can watch this excellent whiteboard video below.

As one would expect, the news that Ethereum “could become deflationary” sometime later this year, sparked renewed interest from the bulls, and as if by some sort of magic, the price moved up RIGHT OFF the reload zone and has confirmed bullish market structure on the 4hr and daily time frames.

 

BTC/USD WEEKLY

HIGHLIGHTS

$BTC confirmed bullish market structure on the daily and is parked in the Short Reload Zone (RLZ) we discussed previously. THIS is the area to watch if you’re wondering whether the market topped out not. If we’re to consolidate more in this range, we could move down from here to test a higher low.

 

BTC/USD DAILY

HIGHLIGHTS

You can see here on the daily that we’re still trading within the previously established consolidation range. Bullish continuation remains the most likely outcome as long as the price doesn’t close a daily candle below the recent $43,000 lows. That would confirm a bearish reversal on the weekly and be cause for mid-term concern.

 

BTC DOMINANCE WEEKLY

HIGHLIGHTS

$BTC dominance is retesting local lows this week after a clean bearish retest + rejection off the underside of the 20-Week SMA and the HTF trendline. If we see a breakdown from the lows, an accelerated move in Altcoin / Bitcoin pairs could be in the cards this month and into Q2.

 

ETH/USD WEEKLY

HIGHLIGHTS

$ETH is in a very similar situation. Retesting the Chaos PRZ that put the local top in the market after a quick tag of previous All-Time Highs (ATHs), confluent with the PumpChaserZone. Probability points to a bullish continuation as long as we don’t see a daily close below the recent ~$1,300 lows.

 

ETH/USD DAILY

HIGHLIGHTS

Ethereum bulls will want to watch the volume on this daily chart for a breakout in buy volume. If we get that, it would be a stamp of approval for the King of the altcoins and indicate that buyer interest at these levels remains strong.

 

ETH/BTC WEEKLY

HIGHLIGHTS

$ETHBTC has played with a number of Fib levels on its recent pullback. The cleanest look is a High-time Frame (HTF) #PumpChaserZone drawn off the 2020 lows. Price is parked in this zone and just closed a weekly candle back above the 20-Week Slow Moving Average (SMA).

There is a path to absolutely explosive growth in the event that EIP-1559 and ETH2 can deliver on their goals to scale the network.

 

ALTCOIN PERP

HIGHLIGHTS

The Altcoin perp appears to have resolved the 4.669 Chaos PRZ bullishly. This suggests a move to the 8.77 Chaos PRZ is next. That would align with a continuation on $ETHBTC and the aforementioned breakdown in $BTC dominance. This could be our leading indicator that the bullish scenario will play out. Technically still just “consolidating” for now.

 

DEFI PERP WEEKLY

HIGHLIGHTS

The DeFi perp looks primed for continuation as well after a clean tag of the PumpChaserZone in late February. There is no reason to think that DeFi has reached its max potential. Don’t be surprised if this is trading up at the Chaos PRZ 2 objective sometime in Q2 2021.

 

Altcoin Total Marketcap

HIGHLIGHTS

The Total Altcoin marketcap has completed a bullish retest of the previous ATH’s and looks set for continuation. New projects are being flooded with interest from aggressive pre-sale buyers, IDOs & IEOs are almost all launching at a multi-x return right out of the gates.

With this new flood of coins entering the market, this chart should see more explosive upside fairly soon.

 

Heatmap #1

$RAY looks to have completed its post-launch consolidation, confirming bullish market structure on the 4hr with buy volume ramping up this week.

Farmers need to migrate to Serum V3 if you haven’t already: https://raydium.gitbook.io/raydium/updates/upgrading-to-serum-dex3

Inflation is still a mid-term concern but for now, it looks as though demand is overcoming the daily farming and staking rewards. A break of local highs would likely drive the price up into the Chaos PRZ around $17.

 

Heatmap #2

$YOP has cooled off after its big “launchpad aggregator” announcement and has found support at previous highs around $1.60. This chart looks hungry for continuation, and with a Binance Smart Chain bridge “coming soon”, it appears this project has no desire to slow down its rapid pace of development. App-launch is expected sometime in Q2.

 

Heatmap #3

$ID continues to consolidate in the Reload Zone this week after a multi-x rally following its $.15 IDO on @kyber. Price looks like it could break out at any moment here. A retest of the $.55-$.60 level following a breakout is an entry I’ll be looking for to add to my existing position.

 

I have no doubt that the crypto market is going to continue to provide us with INCREDIBLE opportunities this year. By managing risk and playing smart, we enable ourselves to stick around and maximize our potential.

Have a great week, and whatever you do, always play from a position of strength!

If you haven’t already, you can follow me on Twitter @randomtask555 & subscribe to our Youtube Channel here: youtube.com/c/Hxrolabs.

 

 

Disclaimer:

The following commentary is provided for informational purposes only and may not represent the views of Hxro Games Ltd. or its affiliates, and should not be viewed as legal, tax, investment, financial or other advice. Digital asset transactions are inherently risky, and you are fully and solely responsible for evaluating your purchasing decisions at your own risk. Past performance is not indicative of future results.

©2021 by Hxro Labs

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