Ethereum price could soar to $ 500 as DeFi pumps it up

The cost of Ethereum is indicated on steroids. In literal sense. There is no slowing down. Its community is active, and the support services that make the Ether whole are at the limit of their capabilities.

Defi explosion and gas prices

The DeFi ecosystem is rapidly developing, which leads to an increase in the cost of ETH and gas. In particular, the development of exciting market strategies for Ethereum DEX is noteworthy. Based on the principles of decentralization and creating a reliable, liquid system that complements the demanding DeFi ecosystem, ETH holders become major beneficiaries.

This was largely expected, as price follows utility, which in turn is determined by demand. The higher the demand, the higher the ETH score.

BitGo side chain plans

To keep up with DeFi’s demands, BitGo, the custodian of crypto assets, has previously stated that it is looking for ways to create an Ethereum side chain for wBTC.

This is a tokenized version of Bitcoin that meets the ERC-20 standards. Instead of just holding and getting capital gains, the BTC holder has the option to participate in the lucrative DeFi scene.

By lending or providing liquidity to the pool, the owner receives attractive interest without giving up capital gains. Each wBTC is linked and is subject to exchange for BTC.

BitGo’s technical Director said:

This year, we saw that the popularity of WBTC was largely due to the well-structured DeFi industry. We will contact our community partners to find out if they are interested in working together on the sidechain.»

Phase 1 demonstration

To deal with the high gas fee that is now synonymous with Ethereum and DeFi, the development team is looking for a solution in Eth2. Phase 0 will be activated approximately in the next five months.

This may happen in a few months, but now the team has released a phase 1 prototype demonstrating Eth1 transfers to a more scalable Eth2 environment, with a low Commission.

Price analysis of Ethereum At $ 434 apiece, Ethereum outperforms both the US dollar and Bitcoin. Over the last week of trading, the coin has increased by 10% against both pairs.

The bulls active again, and tend to rise as participation increases, and as volume data becomes available. After a brief consolidation, Ether is now trending above the 20-day moving average with decent volumes as price action returns to trend after rebounding from the previous resistance trend line, now support marked with a bullish flag.

However, participation is not crucial. Unless there is otherwise a sharp rally after the August 2020 highs of $ 450, bulls should proceed cautiously. $ 450 is an important resistance level. While bulls can buy on declines, expecting the utility to drive demand for ETH, the volumes that determine the trend should exceed the daily average of the first three weeks of August for confirmation. A break above 450 will increase volatility and possibly open the door to $ 500.