Ethereum, Litecoin, and Ripple’s XRP – Daily Tech Analysis – March 18th, 2021
Ethereum
Ethereum rose by 1.05% on Wednesday. Following on from a 0.67% gain on Tuesday, Ethereum ended the day at $1,824.74.
A bearish start to the day saw Ethereum slide to a mid-day intraday low $1,742.0 before making a move.
Steering clear of the first major support level at $1,735, Ethereum rose to a late intraday high $1,841.13.
Falling short of the first major resistance level at $1,848, Ethereum eased back to end the day at $1,820 levels.
At the time of writing, Ethereum was up by 0.40% to $1,832.07. A mixed start to the day saw Ethereum fall to an early morning low $1,823.48 before rising to a high $1,838.89.
Ethereum left the major support and resistance levels untested early on.
For the day ahead
Ethereum would need to avoid a fall through the pivot level at $1,803 to support a run at the first major resistance level at $1,863.
Support from the broader market would be needed, however, for Ethereum to break out from Wednesday’s high $1,841.13.
Barring an extended crypto rally, the first major resistance level would likely cap any upside.
In the event of a breakout, Ethereum could test resistance at $1,950 before any pullback. The second major resistance level sits at $1,902.
Failure to avoid a fall through the $1,803 pivot would bring the first major support level at $1,764 into play.
Barring an extended sell-off, however, Ethereum should steer clear of sub-$1,700 levels. The second major support level at $1,704 should limit the downside.
Looking at the Technical Indicators
First Major Support Level: $1,764
Pivot Level: $1,803
First Major Resistance Level: $1,863
23.6% FIB Retracement Level: $1,579
38.2% FIB Retracement Level: $1,292
62% FIB Retracement Level: $830
Litecoin
Litecoin rose by 2.17% on Wednesday. Following on from a 0.49% gain on Tuesday, Litecoin ended the day at $206.04.
A choppy start to the day saw Litecoin saw Litecoin rise to a late morning intraday high $206.88 before hitting reverse.
Coming up short of the first major resistance level at $208, Litecoin fell to a mid-day intraday low $194.25.
Story continues
The reversal saw Litecoin fall through the 23.6% FIB of $195 before recovering.
Finding support at the first major support level at $194, Litecoin bounced back to end the day at $206.
At the time of writing, Litecoin was up by 0.17% to $206.38. A bullish start to the day saw Litecoin rise from an early morning low $206.08 to a high $207.73.
Litecoin left the major support and resistance levels untested early on.
For the day ahead
Litecoin would need to avoid a fall through the $202 pivot level to support a run at the first major resistance level at $211.
Support from the broader market would be needed, however, for Litecoin to break out from this morning’s high $207.73.
Barring an extended crypto rally, the first major resistance level would likely cap any upside.
In the event of an extended rally, Litecoin could test resistance at $220 before any pullback. The second major resistance level sits at $215.
Failure to avoid a fall through the $202 pivot level would bring the first major support level at $198 and the 23.6% FIB of $195 into play.
Barring an extended sell-off, Litecoin should steer clear of sub-$190 support levels. The second major support level at $190 should limit the downside.
Looking at the Technical Indicators
First Major Support Level: $198
Pivot Level: $202
First Major Resistance Level: $211
23.6% FIB Retracement Level: $195
38.2% FIB Retracement Level: $163
62% FIB Retracement Level: $110
Ripple’s XRP
Ripple’s XRP rose by 2.04% on Wednesday. Following on from a 5.48% rally on Tuesday, Ripple’s XRP ended the day at $0.47013.
A bullish start saw Ripple’s XRP break through the 38.2% FIB of $0.4632 to an early morning intraday high $0.48200 before hitting reverse.
Coming up well short of the first major resistance level at $0.5182, Ripple’s XRP slid to a late morning intraday low $0.45400.
While steering clear of the first major support level at $0.4144, Ripple’s XRP fell back through the 38.2% FIB.
Finding late morning support, however, Ripple’s XRP broke back through the 38.2% FIB to $0.472 levels.
In spite of a late pullback, Ripple’s XRP wrapped up the day at $0.47 levels.
At the time of writing, Ripple’s XRP was up by 0.56% to $0.47276. A bullish start to the day saw Ripple’s XRP rise from an early morning low $0.47014 to a high $0.47276.
Ripple’s XRP left the major support and resistance levels untested early on.
For the day ahead
Ripple’s XRP will need to avoid a fall through the $0.4687 pivot level to bring the first major resistance level at $0.4834 into play.
Support from the broader market would be needed, however, for Ripple’s XRP to break back through to $0.48 levels.
Barring an extended crypto rally, the first major resistance level and Wednesday’s high $0.4820 would cap any upside.
In the event of an extended rally, Ripple’s XRP could test resistance at $0.50 before any pullback. The second major resistance level sits at $0.4967.
Failure to avoid a fall through the $0.4687 pivot would bring the 38.2% FIB of $0.4632 and the first major support level at $0.4554 into play.
Barring an extended sell-off, however, Ripple’s XRP should steer clear of sub-$0.45 levels. The second major support level sits at $0.4407.
Looking at the Technical Indicators
First Major Support Level: $0.4554
Pivot Level: $0.4687
First Major resistance Level: $0.4834
23.6% FIB Retracement Level: $0.5320
38.2% FIB Retracement Level: $0.4632
62% FIB Retracement Level: $0.3521
Please let us know what you think in the comments below.
Thanks, Bob
This article was originally posted on FX Empire
More From FXEMPIRE:
Should You Chase Ethereum Here Or Wait For A Pullback?
In my previous article on Ethereum (ETH) from three weeks ago, I was “… looking for a somewhat tricky, whipsawing, move higher, ideally to around $1880+/-40, but it could even challenge the recent all-time high. From there, I expect several weeks of downside back to $1200+/100. After that, I anticipated the next rally to ~$3000+. However, a weekly close below $1200 targets $900…”
Fast forward, and ETH topped this week, so far, at $1891. Thus, using the Elliott Wave Principle (EWP) and Technical Analysis (TA) was once again a powerful way to forecast the price levels to be reached three weeks in advance. Therefore, it is time to become more cautious by, for example, raising stops, maybe take (partial profits), etc.
In this week’s update, I would like to look at the weekly and monthly charts to better understand ETH’s big picture potential (months to years out). See Figure 1 below.
Figure 1. ETH weekly and monthly charts with EWP count and technical indicators.
A retest of 1200+/-100 and then rally to new all-time highs.
As you can see, the weekly and monthly charts feature two different EWP wave-labels, but both point to higher prices (anticipated paths). The weekly chart’s EWP points to two more rallies (black major-5 and blue Primary-V) after an initial pullback (major-4) before this Bull run is over. Whereas the monthly chart suggests, we could see three more rallies (add purple Cycle 5). I always have an alternate (more Bullish) EWP count for Bull runs like ETH is in to ensure my Premium Crypto Trading Members do not miss out or get caught on the wrong side. The market will eventually tell me which one is correct: “anticipate, monitor, and adjust if necessary.”
What we do know, with all certainty, is that the weekly technical indicators (RSI5, MACD histogram, FSTO, and MFI14) are all negatively diverging (red squares). Although divergence is only divergence till it is not, it means ETH is now moving higher on less strength, less momentum, and less liquidity. The latter is essential because liquidity drives markets. If the buying dries up, only selling is left. However, ETH is well-above all its important Simple Moving Averages (SMAs), which are all rising and Bullishly stacked: 10w>20w>50w>200w). Thus this is still a 100% strong, Bull market.
Story continues
The monthly chart is different as there are no negative divergences on the technical indicators. Instead, the RSI5 is getting very overbought, suggesting there’s less room for upside left over the next 1-2 months. See the 2017 rally for example. However, the monthly Money Flow is still strong, and so is the MACD. Only the FSTO is not in favor of more upside.
Nonetheless, also on the monthly chart, the SMA setup is 100% Bullish: ETH is well-above its rising SMAs, which are also Bullishly stacked: 10m>20m>50m. Thus, this is still a 100% robust, long-term Bull market. Hence, the one-degree higher EWP count compared to what is labeled on the weekly chart has merit.
Bottom line
ETH’s weekly and monthly charts are 100% Bullish and suggest plenty of upside left over the coming months to years. However, negative divergences are creeping in on the weekly chart suggesting a pullback is most likely imminent. A daily close below $1657 will be a severe warning that the $1200+/-100 level will be revisited to complete a more significant correction before ETH can move to new ATHs again.
Buy Ethereum with Binance
This article was originally posted on FX Empire
More From FXEMPIRE:
Valid Points: Ethereum’s Proof-of-Stake May Happen Sooner Than You Think
Eth 2.0 may be coming to a computer screen near you quicker than most anticipated, including the Ethereum developers.
Last week, Vitalik Buterin released a “quick merge via fork choice change” document – a lighter version of the Executable Beacon Chain for quick deployment. While only a loose technical document, the plan ostensibly serves as a notice against any further agitation from Ethereum miners as the merge would allow Ethereum to abandon mining in a rapid fashion.
The Executable Beacon Chain is a proposal to attach Eth 1.x – which we will now refer to as Ethpow (proof-of-work Ethereum) – onto the currently running proof-of-stake Ethereum: the Beacon Chain.
Related: Bitcoin Is Not a Stock
The proposal works by having slightly altered Ethereum software, like Geth or OpenEthereum, point its transaction flow at the Beacon Chain. Instead of miners packaging transactions into blocks, the Beacon Chain’s validators will verify and finalize transactions.
“The only change required on the ethpow side is that the client must have a communication channel with a trusted beacon node and must change its fork choice rule,” Buterin writes.
Why the rush?
A quickened transition schedule is being considered for a few reasons. One recent consideration has been rising tensions between mining parties and Ethereum developers as EIP 1559 and PoS come into focus. The former proposal is highly contested by mining parties, but has achieved enough support among developers to be included in July’s London hard fork. PoS, of course, would see mining done away with completely.
Developers, however, have the high ground in this fight. A quick merge to PoS would only require “at least one honest miner” in order to start the merge. Multiple honest mining parties pointing blocks to the Beacon Chain would entail a smooth transition, Buterin says.
Related: Bitcoin Volatility Index ‘BitVol’ Makes First Trade
Story continues
A quick transition to PoS does preclude the inclusion of multiple highly touted Ethereum tech stacks, at least for the moment.
Yet, at the end of the day a transition to PoS remains the goal of Ethereum developers, as it has been since before Ethpow launched. Any transition to PoS where Ethereum doesn’t lose its top dog position as the go-to platform for decentralized apps would likely be considered a victory.
Pulse check: Validator efficiencies
If you’re new to Valid Points and the topic of Ethereum 2.0 in general, be sure to check out our 101 explainer on Eth 2.0 metrics to get up to speed about terminology used throughout this newsletter.
CoinDesk’s Eth 2.0 validator node, Zelda, is humming along perfectly, earning roughly 0.0073 ETH or $13.12 per day.
While the amount of reward earned by our Eth 2.0 validator has not changed significantly over the past few weeks, I did notice a spike in Zelda’s computer processing power and a subsequent drop in her memory usage.
According to CoinDesk’s data dashboard, Zelda’s central processing unit (CPU) usage almost doubled from around 100% to 200% on Friday, March 12, and has stayed at these heightened levels ever since.
This suggests that Zelda is consuming more electrical energy in order to perform the same tasks it did before. For context, Zelda has four CPUs it can max out before validator operations are negatively impacted. Operating at a level of 200% suggests we’re using the max computing power of two out of four CPUs.
At the same time, Zelda’s usage of random access memory (RAM), which is the component of a computer that is reserved for temporary data storage, has gone down from around 4 GB to rough 2.5 GB.
This suggests the memory capacity needed for running this Eth 2.0 validator has dropped. Zelda has up to 16GB of RAM, enough for an average desktop computer to run various applications and demanding games. For Eth 2.0 validating, we use roughly 15% of total RAM, enough for tablet devices to use.
Ethereum validator rewards vs. mining rewards
It’s important to note that under a proof-of-work (PoW) consensus protocol, whereby transactions and blocks are finalized through the process of mining, the aim would be to consistently max out a computer’s processing power and optimize all unused components of hardware for increasing the probability of earning network rewards.
Under Ethereum’s proof-of-stake (PoS) consensus protocol, there’s no need to do either of these things. Despite operating below its computational capacity, Zelda still maintains an effectiveness of 100%, according to beaconcha.in. This is because, unlike mining, staking isn’t about competing for rewards against other validators through greater hashpower.
All validators who keep their operations up and running are rewarded on a consistent and regular basis in the form of interest on their stake. The only way to substantially increase the amount of rewards earned on the network is to stake more wealth in 32 ETH increments. (More on the reward dynamics of Eth 2.0 validators versus Ethereum miners here.)
The Eth 2.0 network does not reward aggressive increases in computing power nor sneaky optimizations to hardware. If anything, developers of the protocol are working hard to find ways in which the computational burden of being a validator can be reduced even further and updated so that even a mobile device could one day be sufficient for securing the network.
Going back to the mysterious changes in CPU usage and RAM, it turns out a code update was released by CoinDesk Director of Engineering Spencer Beggs last Friday in preparation for Ethereum’s upcoming system-wide upgrade dubbed “Berlin.”
As an Eth 2.0 validator, Zelda’s responsibilities can only be performed by connecting to both Ethereum’s PoW and PoS networks. The upcoming upgrade to Ethereum’s PoW network required Beggs to update part of our software, which likely triggered these changes in our energy consumption and memory usage.
This code update is mandatory for all Eth 2.0 validators and must be implemented by April 14, 2021, at the latest. If you’re a validator and haven’t yet made the upgrade, you can download and install the latest software releases for Berlin here.
Validated takes
Editorial on getting Ethereum to proof-of-stake as soon as humanly possible (Blog post, Ben Edgington)
Associated Press NFT artwork sells for $180,000 in ETH (Article, CoinDesk)
Bitcoin, baseball and new drama in the Ethereum 2.0 timeline (Video, CoinDesk)
DeFi lending protocolAlchemix raises $4.9 million in round led by CMS and Alameda (Article, CoinDesk)
How to create, buy and sell NFTs (Article, CoinDesk)
Factoid of the week
Open comms
Feel free to reply any time and email research@coindesk.com with your thoughts, comments or queries about today’s newsletter. Between reads, chat with us on Twitter.
Valid Points incorporates information and data directly from CoinDesk’s own Eth 2.0 validator node in weekly analysis. All profits made from this staking venture will be donated to a charity of our choosing once transfers are enabled on the network. For a full overview of the project, check out our announcement post.
You can verify the activity of the CoinDesk Eth 2.0 validator in real time through our public validator key, which is:
0xad7fef3b2350d220de3ae360c70d7f488926b6117e5f785a8995487c46d323ddad0f574fdcc50eeefec34ed9d2039ecb.
Related Stories