Ethereum (ETH) Bounces Back Following a Slip Below $3,000 Earlier This Week – What’s Next?

Ethereum has experienced a volatile start to 2018, falling behind Bitcoin in the cryptocurrency rankings as markets continue to re-adjust. But Ethereum is now looking strong again following this week’s recovery – what will be next?

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Ethereum (ETH) has been on a rollercoaster ride this week. The cryptocurrency slipped below $3,000 earlier this week and is now bouncing back above the $3,000 mark. What’s next for Ethereum? Read more in detail here: ethereum price prediction $100,000.

On the strength of the inflation numbers reported yesterday, market mood has been less gloomy. The Consumer Price Index rose by 7% from January through December, according to a study provided by the Bureau of Labor Statistics of the Department of Labor. The news revived the cryptocurrency market, which is now mostly in the green as a result of leading cryptocurrencies reporting big gains.

For the first time since last Thursday, Bitcoin climbed beyond $44,000 yesterday. Following a sharp decline that saw it hit a multi-month low of $2,948 on Monday during trade, ether made comparable market recovery advances. The token has maintained its position above the $3,350 area thanks to 24-hour gains of 3.74 percent.

Here is a summary of additional recent, fascinating Ethereum-related happenings.

Could Ethereum layer-1 scaling solutions be doomed by ETH2.0? Experts concur.

Ethereum is still transitioning to Ethereum 2.0, a revision that aims to address the present ecosystem’s accessibility, scalability, and other problems. The changeover, which is being made in stages, began in December 2020 and is anticipated to be finished in the latter part of this year.

The status of Ethereum layer-1 solutions, according to experts, will be considerably impacted by the release of Ethereum 2.0. Security and sustainability (environmental concerns) are two challenges that the update is supposed to solve. The experts in the field claim that if Ethereum 2.0 is completely deployed, the usefulness of the latter might be drastically diminished.

It is important to note that Ethereum layer-1 solutions compete with both Ethereum 2.0 and the existing layer-2 alternatives. Layer-1s might possibly lose their leadership position, but for the time being, adoption of them is soaring.

To combat excessive gas prices, Vitalik Buterin of Ethereum suggests a new multidimensional gas structure.

Transaction fees continue to be a major problem for the network even as Ethereum continues on its journey to grow towards Ethereum 2.0. Vitalik Buterin, its co-founder, put out a better protocol to solve this problem last Wednesday. A multifaceted strategy for developing a pricing model for transactions on the Ethereum network is suggested by the proposed EIP-1559 protocol.

The model would address these excessive costs by capping the amount of a specific resource that a single block may use (with a basic gas tax set per resource).

The blocks’ present limitations would be preserved under the first of Buterin’s two recommended pathways. Fees for specialized resources, such call data, would be kept to a small portion of the overall base cost allotted for each unit of resource.

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The quantity of gas that each block requires will be unlimited under the second, “more pure” option. However, there will be a burst per resource limit and a fixed base gas charge for consuming resources. Additionally, he admitted that putting this option into practice would be challenging but said that the model would really provide a synonymous relationship between gas and ETH.

In the next two decades, it is anticipated that Ethereum will handle 50% of all financial transactions worldwide.

In an interview with Bloomberg that was published on Sunday, Pantera Capital hedge fund manager Joey Krug said that in the next 10 to 20 years, Ethereum could handle up to or more than 50% of all financial transactions worldwide.

The Pantera Capital co-chief investment officer defended his audacious forecast by pointing out that Ethereum has consistently maintained its position as the dominant ecosystem in the developing DeFi market. Although competitors to Ethereum, such as Solana and Cardano, have arisen as solutions to address the ever-annoying problem of high gas prices, according to Krug, these and other altcoins have too many trade-offs in the decentralization field.

He also questioned whether they were well adapted to integrate into the new global financial system, citing to security issues. The CEO from Pantera Capital said that he does not see them (alts) exerting any pressure on Ethereum. Despite the enormous growth they have had over the last twelve months, Krug also pointed out that these competitors still depend on the second-largest crypto network.

However, he made it clear that the success he foresees hinges on the smooth transition from the less effective proof-of-work model to the more effective proof-of-stake one.

Performance of the Ethereum (ETH) market

The native token of Ethereum passed the $3,100 mark on Tuesday and is currently aiming for the $3,400 barrier level. The bulls seem to be convinced that breaking over this barrier would put Ether on the upswing and help it move closer to $3,800.

1642078459_792_Ethereum-ETH-Bounces-Back-Following-a-Slip-Below-3000-Earlier

24 hour trading chart for ETH/USD

The coin is now fluctuating within a small range between $3,340 and $3,380, according to the 24-hour ETH/USD chart. The critical levels to watch for a positive signal are $3,350 and $3,600, according to cryptocurrency expert Michal van de Poppe, who recently provided his price analysis for Ethereum on Twitter. Van de Poppe also said briefly that Ether has seen a “Good rebound” after its decline.

Visit our investing in Ethereum guide to find out more about this coin.

Ethereum (ETH) is a cryptocurrency that has seen a lot of fluctuation over the past few weeks. It has been on an upward trend and has recently reached $3,000. What’s next? Reference: ethereum price 2022.

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