What Is Ethereum And How Does It Work?

What Is Ethereum And How Does It Work?

The Ethereum network can also be used to store data and run decentralized applications. Rather than hosting software on a server owned and operated by Google or Amazon, where the one company controls the data, people can host applications on the Ethereum blockchain. This gives users control over their data and they have open use of the app as there’s no central authority managing everything.

Perhaps one of the most intriguing use cases involving Ether and Ethereum are self-executing contracts, or so-called smart contracts. Like any other contract, two parties make an agreement about the delivery of goods or services in the future. Unlike conventional contracts, lawyers aren’t necessary: The parties code the contract on the Ethereum blockchain, and once the conditions of the contract are met, it self-executes and delivers Ether to the appropriate party.

Ethereum vs Bitcoin

Bitcoin’s primary use is as a virtual currency and store of value. Ether also works as a virtual currency and store of value, but the decentralized Ethereum network makes it possible to create and run applications, smart contracts and other transactions on the network. Bitcoin doesn’t offer these functions. It’s only used as a currency and store of value.

Ethereum Price Analysis: 27 March

The ETH/USD pair moved hand in hand with the BTC/USD pair in the markets, a correlation that has been rising since early March, and now had a value of 0.78, denoting a strong correlation. ETH/BTC pair was trading at a level of support. Ethereum simply must keep pace with Bitcoin in order to recover toward $2000 in the coming weeks.

Ethereum 12-hour chart

On the charts, ETH formed a short-term range (blue) from $1727 to $1853 for a time period of just over two weeks. ETH was forced to drop beneath this range following strong selling pressure at the same time when Bitcoin plunged from $57.8k to $53.8k. It is a fact that correlation was on the rise, as ETH followed BTC in the markets.

Two different sets of Fibonacci Retracement levels were plotted for ETH for different moves of Ether, and their confluence highlighted some areas of importance for Ether.

A rejection at the $2040 mark in mid-February was followed by an attempt at recovery, but this recovery halted at $1920. This makes the $1900 area significant as a supply zone, while the $1690-$1720 will also offer resistance to price.

Technical indicators had a bearish leaning, and the bounce off $1550 has flipped momentum to bullish in the shorter timeframes. The lack of buyers was an obstacle to ETH recovery.

Flipping the $1720 area to support would be an opportunity to open long positions.

Reasoning

OBV was in a steady downtrend, while RSI tested neutral 50 as resistance. Stochastic RSI was climbing out of the oversold territory, but momentum was still in bearish hands on the 12-hour chart.

$1720 is a critical level in the coming days. If buying volume drives prices higher, the $1690-$1720 region would present a buying opportunity.

Conclusion

A revisit to $1550 or a flip of the $1700 area would present an opportunity to buy Ether, but at the time of writing momentum leaned in favor of bears.

What’s next for Ethereum, Cardano, Vechain and Holo after their weeklong bullish streak?

The hottest altcoins based on trade volume and transaction data from the past 24 hours are HOLO, VET, ADA, ETH in that order. The price gain in the past 24 hours is 30.99% for Holo, double-digit gains below 15% for VeChain, Cardano, and Ethereum.

With increasing conversations on crypto Twitter regarding the lack of practical usage and application for top alts and DeFi tokens, the interest in HOT, VET, and ADA has spiked considerably.

HOT’s trade volume was up over 214% in the past 24 hours, this increased liquidity is being absorbed by demand on Binance, in the USDT market, and on Turkish exchange Paribu’s fiat market. HOT hit its ATH earlier today, at $0.01134 based on price data from coinmarketcap.com.

With a YTD ROI of over 152%, HOT has offered double-digit returns to retail traders in the past month. Similarly, ADA and VET’s price was up 5.71% and 11.82%, respectively. In the case of ADA, a bullish pattern emerges from the repeating ADA-BTC volume trend, the following chart shows ADA-BTC trade volume for the past 6 months.

Currently, based on on-chain analysis, intotheblock, data suggests that the sentiment is bearish for ADA, but the volume is of the level before a potential breakthrough. It is likely that the rally slows further over the weekend and resumes from the next week.

In the case of VET, after over two weeks of large volume transactions, the sentiment has dropped to bearish and the concentration by large HODLers is dropping.

The 24-hour trade volume has dropped by over 12% and this signals a correction in VET’s price. Based on analysis from Cryptocompare, over 90% of VET’s trade volume is from Binance markets, and currently, the price is up over 10% in the past 24 hours.

VET may still be on a bullish streak, an overextended price rally on Binance. As in the case of ETH, the asset continues to be undervalued even at the current price level. ETH was rangebound below $1738, unless there is enough liquidity it may be challenging for the volatility to increase and cross the $1738 level. The bullish streak for HOT, VET, and ETH may be extended, with a cooling off of ADA.