Ethereum (ETH) Price Awakens, New Highs or Downturn Ahead? | cryptozapper

Ethereum (ETH) Price Awakens, New Highs or Downturn Ahead?

ETH prices are at a crossroads, with the danger of sinking far below $300.

Ethereum (ETH) rallied this Monday, once again recovering the $300, but the asset is seen as going through a decisive phase, either hiking up to a much higher valuation or sinking toward $280.

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ETH is up 7.4% in the past 24 hours, to $309.67. At the current price levels, ETH is seen potentially continuing toward the $400 level:

ETH has several bullish factors, including the phasing out of mining in 2020. But another bullish factor is the news of a drastic drop in new ETH issuance from 2021. The intentions are to reduce the block reward tenfold, to 0.22 ETH per block.

Ethereum News

According to developer Justin Drake, cited by Trustnodes, the timeline includes a reduction of the reward in March 2021, if all other forks and updates in the interim go through. The aim is to move Ethereum fully to Proof-of-Stake block creation, and the exact reward would depend on the number of token holders securing the network.

The other reason for the ETH growth is the high-level liquidity, with more than $950 million’s equivalent entering the ETH market each day from Tether (USDT), and significant inflows from the Bitcoin (BTC) markets.

There are currently 1.2 billion USDT on the Ethereum network, with the potential to add more tokens when migrating from the Omni layer. Binance is also moving its USDT tokens through the Ethereum network.

ETH, however, has been sinking in BTC terms for more than a year, hovering near lows of 0.02 BTC. The expectation for ETH is to rise in case an altcoin season starts, but this development is also highly uncertain.

More than 78% of the entire ETH supply has been issued and is in circulation. Production of new ETH will probably stop with around 100 million tokens in circulation, with a significant part of the supply locked for staking, or used as collateral, as in the case of Maker DAO (MKR).

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