Ethereum’s Long-Term Bullish Outlook
Despite concerns about network congestion and high gas fees, Ethereum remains bullish in the long term, according to borovik.eth, a partner at Rollbit. The positive outlook is driven by Ethereum’s developer ecosystem, its role in the broader blockchain ecosystem, and the launch of numerous Layer-2 solutions (L2s).
Optimism About Layer-2 Activity
Borovik.eth is optimistic about Ethereum, even as other layer-1 coins like Solana and Cardano soar. The analyst believes that Ethereum’s scaling challenges are manageable and developers will find permanent solutions over time. Based on this optimism, Borovik.eth expects ETH to recover strongly in the coming sessions, especially with the development of layer-2 scaling options backed by major companies like Coinbase and venture capitalists.
ETH’s Performance and Resistance Levels
As of December 26, ETH is in an uptrend but cooling off after solid gains in Q4 2023. It is underperforming compared to other layer-1 platforms like Injective Protocol and Solana. ETH prices are still below $2,400, a critical resistance level. If bulls overcome this level, ETH may surge towards $3,500 or higher in the future.
The Importance of Layer-2 Solutions
Big companies like Coinbase are adopting layer-2 solutions to transact cheaply while relying on the security of the Ethereum mainnet. Over 60% of Coinbase’s revenue from Base comes from rollup fees charged, highlighting the significance of scaling solutions and Ethereum’s role in this ecosystem.
The Upcoming Dencun Upgrade
The upcoming Dencun Upgrade, set for integration next year, will further reduce layer-2 fees. Developers plan to release this update in the Goerli test network as early as mid-January 2024.
Hot Take: Ethereum’s Positive Outlook
Despite challenges, Ethereum’s positive long-term outlook is driven by its developer ecosystem, role in the broader blockchain ecosystem, and the launch of layer-2 solutions. With major companies like Coinbase adopting these solutions, ETH is well-positioned for a bull run. While it faces resistance below $2,400, if this level is surpassed, ETH could surge towards $3,500 or higher. The upcoming Dencun Upgrade will also contribute to reducing layer-2 fees and further enhance Ethereum’s scalability. Overall, Ethereum remains a promising investment in the crypto market.
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