- Ethereum is close to becoming the first blockchain to process $1 trillion this year
- ETH price is trading 8.7% in the green as buyers work to secure the highest weekly close since August
- A pullback to $395 would offer a chance to buy ETH at a solid risk-reward level
Ethereum (ETH) price is on its way to secure the biggest weekly gains in over 2 months after the world’s second largest digital asset broke above the intraweekly resistance line.
Fundamental analysis: The first blockchain to process $1 trillion this year
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Ethereum is close to becoming the first blockchain to process $1 trillion this year, recording a twice higher transaction volume than Bitcoin. The transaction volume’s 30-day rolling daily average is currently sitting at around $7 billion, substantially higher than Bitcoin’s $3 billion, according to the crypto data provider Messari.
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If it manages to maintain this rate, Ethereum is likely to become the first blockchain to process $1 trillion in transactions this year, Messari said. Bitcoin is expected to settle around $800 million this year, its best performance after 2018.
Apart from this year, Ethereum’s best performance in terms of transaction volume was registered in 2018 when it settled around $500 million in volume, compared to Bitcoin’s $849 million that year.
However, this doesn’t represent a direct comparison between the two largest blockchains in the world as Bitcoin mainly reflects transactions of value denominated in Bitcoin, while Ethereum handles the transactions for an entire sector.
Ryan Watkins at Messari said a large part of Ethereum’s volume comes as a result of a significant surge in ERC-20 stablecoin volumes, with much of Tether (USDT) transfers now occurring on Ethereum and yield demand boosting supply increase of over 600% for MakerDAO’s Dai stablecoin.
He also pointed to the soaring on-chain liquidity from decentralized exchanges, with Uniswap and Curve together securing over $20 billion in volume combined in the last month. DEXs currently account for over 13.6% of total exchange volumes.
Still, Messari said that “the next twelve months could come to define the platform wars” in crypto, noting Ethereum’s ongoing high fees as a problem that rival blockchains will seek to solve, alongside “the rise of parallel DeFi ecosystems.”
Technical analysis: ETH price breaks higher
Ethereum (ETH) price is currently trading 8.7% in the green as buyers work to secure the highest weekly close since August. More importantly, the buyers will manage to force a close above the horizontal resistance line at $395 (the red line), which is likely to facilitate more bullishness in the short term.
As seen in the chart, the bulls stopped at the next daily resistance near $415. We may see a rotation lower from these levels to return to $395, offering a chance to buy ETH at a solid risk-reward level. In this case, the $415 remains the first target while the bulls are likely to push for $446 as their major target in November.
Summary
Ethereum is on a good path to become the first blockchain to handle $1 trillion in 2020, marking a two times higher transaction volume than Bitcoin. The world’s second-biggest digital asset has also made progress in the price action as it trades almost 9% higher this week.