January 15 – Ethereum Jumps Higher Ahead of the Constantinople Fork
Ethereum (ETH) has moved higher this morning, ahead of the much-publicized “Constantinople” fork, which is scheduled for tomorrow.
The third-biggest digital currency jumped from $119.69 to $134.50 in less than an hour of the Tuesday’s trading session.
The jump of more than 12% in such a short time frame has no particular reasonable justification. The most likely scenario is that traders are adjusting their positions ahead of the Constantinople fork.
The Ethereum network will move to the new version of its blockchain platform on Wednesday. Unlike its colleague – Bitcoin cash – Ethereum is not expected to split into several successors.
“I really can’t imagine a less contentious hard fork, to be honest. Of all the hard forks in the history of Ethereum, it’s probably the least eventful one,” said Lane Rettig, Ethereum core developer, when speaking to Bloomberg.
The biggest expected change is the decrease from three to two coins per block for the ETH miners. The aim is to reduce the inflation of Ether.
“Being that the inflation rate will drop by a third, it could potentially reduce selling pressure that could come from the miners’ reward,” adds Michael Moro, the chief executive officer of Genesis Global Trading.
Looking at the daily chart of ETH (Graph 1), the price has recovered some of its losses today. Still, it trades below the 100 DMA, which kept the price action below for the past couple of weeks.
Depending on the final outcome of tomorrow’s fork, we still expect the ETH to move higher and eventually retest the broken support, now resistance, which is around the $170 mark.
By the time the ETH arrives there, it is likely that the descending trend line, (the blue line), will meet the major horizontal resistance (the upper purple line), thus creating the key resistance block.
Ethereum is currently the third biggest currency with the market cap of around $13.7 billion.