- ETH/USD may be vulnerable to short-term fluctuations ahead of the hard fork.
- Muir Glacial will be activated at 7:50 UTC.
Ethereum's community is bracing itself for the first hard fork of 2020. The upgrade called Muir Glacial will take place in a couple of hours (2.50 EST or 7.50 UTC) on block #9,200,000.
What is Muir Glacial
Apart from being a glacial in Alaska, it happens to be an emergency hard form on Ethereum blockchain that is aimed to delay the activation of difficulty bomb for another 4 million blocks. The Bomb is a mechanism realized in the ETH code base. It is supposed to trigger an exponential growth of mining difficulty on consensus algorithm proof-of-work (PoW) and thus motivate the network participants to transit to proof-of-stake (PoS).
Why defusing the Bomb
The decision to launch an emergency hard form was made at the beginning of December. Notably, some developers proposed to scrap the bomb mechanism altogether, but the idea was not supported as it might trigger an adverse reaction within the community. Notably, this is not the first time the developers interfere with the mechanism of mining difficulty. In 2017 the team had to implement Byzantium hard to reduce the time of block generation as mining difficulty was growing too fast.
The delay is needed to allow the developers enough time to create a scaling solution and prepare the transition to Ethereum 2.0.
What to expect
Considering that Muir Glacial is a no- contentious hard fork, it is unlikely to split the chain and create two coins. Miners are likely to upgrade as it is in there interesting to delay the Bomb that would slash their revenues. Earlier, we have reported that the community was concerned with the timing of the update. However, according to Etherenodes.org, over 80% of synced clients are ready for the update.
The vast majority of infrastructure providers confirmed their support, while several large exchanges, including Coinbase, Poloniex, Kraken, and Huobi, have yet to clarify their status.
How will ETH react
Ethereum's price may be volatile following the event; however, sharp movements are unlikely unless something goes very wrong. At the time of writing, ETH/USD is changing hands at $129.19, having recovered from the intraday low of $128.40. The second-largest coin has retreated from $132.78 (January 1 high), in line with the broader cryptocurrency market momentum.
From the technical point of view, we will need to see a sustainable move above $130.00 for the upside to gain traction and allow the price to retest Wednesday's high. The next resistance is created by a combination of SMA200 (Simple Moving Average) 4-hour and December 29 high on approach to $138.00.
On the downside, the local support is created by $128.50. SMA100 and SMA50 4-hour reinforce this area. The next support comes at $127.50 (the lower line of 4-hour Bollinger Band). Once it is out of the way, the sell-off is likely to be extended towards $125.00.
ETH/USD, 4-hour chart
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
Ripple's move above this key level could trigger nearly 50% rally for XRP
Ripple has overcome a critical resistance level and flipped into a support floor on the weekly time frame. This development happened while XRP tightly consolidated for roughly 250 days. Investors can expect XRP to kickstart a massive rally.
Optimism price outlook with nearly $90 million worth of OP tokens flooding markets on Friday
Optimism volatility has shrunk in the ours leading to the network’s cliff unlock. It joins the likes of dYdX and Sui, which have similar events on their calendars. As token unlocks are often considered bearish catalysts, investors should brace for a reaction after the event.
Top 3 Price Prediction Bitcoin, Ethereum, Ripple: Retail watches from the sidelines with a bias for shorts
Bitcoin could clear $73,777 peak as BTC bulls resurface. Ethereum might fall 10% before next leg up as ETH RSI teases with sell signal. XRP could lose $0.6000 threshold as Ripple bulls fail to show up.
Jito price could hit $6 as JTO coils up inside this bullish pattern
Jito price action shows a potential cup and handle formation. Based on theoretical measurement rules, a successful breakout could yield a 56% rally to $6.0. A breakdown of the $3.86 support level would create a lower low for JTO and invalidate the bullish thesis.
Bitcoin: BTC may have recovered, but is it out of the woods?
Bitcoin’s (BTC) upward momentum has shown a significant decline for the past two weeks or so. This development led to a bearish signal on the weekly and an uncertain outlook on the monthly.