There are 3 things you should consider before buying Ethereum rising. Ethereum is rising and is currently trading 80% higher than it was less than three weeks ago, and our data shows it is trading at $3,110. Traders are entering Ethereum in crowds as they anticipate a return to the all-time high above $4,300, but there are some things you should consider before you commit to adolescence. Cryptocoin. com we are now leaning towards them.
Ethereum and EIP1559
Over the past year, the cryptocurrency community has been eagerly awaiting the implementation of the controversial EIP 1559. And the update did not disappoint. Despite a brief dip right after the implementation of the EIP, Ethereum price took action. ETH is currently trading at $3,110, up 20 percent in the past week alone. For traders, the question right now is is it the right time to hit the mark and catch the wave or is it approaching the top? While predicting the price of a cryptocurrency is still a silly business, here are three things to consider.
Almost all Ethereum addresses are in profit and that means bearish trend
One of the metrics that Analisdollarserin uses to judge how close any cryptocurrency is to its peak is how many addresses are in profit. For Ethereum, this indicator means a high risk of selling. As Lex Moskovski observes, more than 96 percent of all ETH addresses are in snow. This is a “red zone” where traders can decide to take profits and lead to price capitulation. ”
However, Lex, chief investment officer at Moskovsky Capital, believes we can stay on top for a while. Additionally, it is worth noting that the last time Ether addresses had such a high rate of profitability was when the cryptocurrency was $800. This was before ETH hit a five-fold higher $4,300.
RSI shows Ether overbought and bearish
The next metric doesn’t make buying Ethereum look any better. ETH’s relative strength index (RSI) is bearish. It shows that the cryptocurrency is in the overbought zone. For traders, the RSI is a critical metric as it tells what is next for any crypto, i.e. whether it is likely to bring in more buyers or if its holders are likely to dump. Any crypto with an RSI above 70 is overbought. This indicates to traders that it may be time to sell the asset. As of writing, TragView shows Ethereum’s RSI at 77. This is a sign to sell the cryptocurrency. And while this indicator is not precise on its own, it is nevertheless noteworthy.
EIP-1559 impact and how important it is
No analysis of Ethereum’s price would be complete without diving into the impact EIP-1559 has had. The proposal was so important that it threatened to tear the Ethereum community apart after rumors surfaced that miners were launching an attack on the same network they had secured for more than 5 years. But the miners’ reaction was justified. This was because this EIP was threatening them.
For traders and speculators, network security features may not be the most important consideration. For them, the impact on the ETH price is more important. And as we’ve seen since its launch, the EIP-1559 can be a boon. EIP burns some of the paid ETH, reducing the supply of Ether and making the network deflationary. Vitalik Buterin once joked that this would make Ethereum “ultrasound money”. After EIP-1559 went live, it started burning a third of ETH for every transaction. EIP-1559 burned 4,685 ETH in its first full day out of approximately 13,000 ETH paid as fees.
In addition to making Ether deflationary and consequently increasing its value as supply dwindles, EIP has another important effect, namely making Ethereum much more attractive to hold. Any Ether holder with at least 32 ETH can stake it and earn annual returns. This will encourage more people to hold on to their ETH instead of making quick profits from trading.