Ethereum price primed for a swift recovery as the network prepares for a major update in July

Ethereum awaits a major upgrade called EIP-1559 scheduled for July to fix some of the problems with ETH fees. The smart-contracts giant has fallen below $1,500 but now aims for a recovery bounce.

Ethereum EIP-1559 could solve many of the current issues faced by users

Ethereum lead developer Tim Beiko had a call with core developers on March 5 and decided to schedule the upgrade for July. The proposal has been widely accepted by everyone besides the miners, as they are directly affected. 

The proposal will change the current Ethereum’s fee structure to dynamically adjust the fees so users only pay the lowest bid for each block instead of miners prioritizing the highest bid. 

Furthermore, the base network fee will now also be burned on each transaction, creating some deflationary mechanism for Ethereum. Despite miners not being happy about the proposal, it will move forward. 

Ethereum price defends key support level and aims for major rebound

On the 3-day chart, Ethereum has once again defended the 26-EMA support level which has proven to be a significant support barrier since April 2020. The uptrend is intact and the key resistance point is located at $2,042, the all-time high.

ETH/USD 3-day chart

Around 12.25 million Ethereum coins are locked away from exchanges in DeFi protocols and projects as well as the Eth2 deposit contract. This represents almost 11% of the circulating supply of Ethereum.