It is clear that projects within the Ethereum network and especially decentralized finance (DeFi) projects are doing extremely well. The DeFi ecosystem last week hit an all-time high above $2 billion with projects such as Compound and CRYPTO.COM Coin increase market dominance.
Read more: Ethereum Price Analysis: Showing Bearish Outlook Below 228 USD
The price action for Ethereum has little that’s there to talk about. For instance, a breakout towards $250 hit a wall at $245. ETH/USD remained pivotal at $240 during the weekend session. On Tuesday, the price slipped back to $235 support before recovering to $240. At the time of writing, Ethereum is flirting with $240 amid increasing sellers’ grip.
According to Ethereum co-founder, Vitalik Buterin, DeFi projects are “valuable and essential” to the cryptocurrency community. However, the projects referred to as yielded farmers are not sustainable in the long term because of their high interest rates collected by liquidity providers. Buterin added while speaking in an interview with Ryan Adams, founder of Mythos Capital:
There’s definitely also a side to DeFi that feels like it sometimes gets more into speculation than value, and more short-term than long-term.
The reality is that these interest rates do not reflect on anything that is remotely sustainable. It’s just a temporary promotion that was created by printing a bunch of compound tokens, and you can’t just keep printing compound tokens forever.
Technical Analysis
For now, the sideways trading will continue for Ethereum until a breakout is confirmed above the hurdle at $245. There is, however, a minor inclination to the downside as observed with the slopping RSI. The good news is that the MACD is holding onto the midline as a signal that bulls are present and ready to push Ether upwards. Moreover, the price is trading above the 50 EMA, the 100 EMA and the Bollinger Band middle curve.
ETH/USD 1-hour chart
Ethereum Key Intraday Levels
Spot rate: $240
Percentage change: -0.07%
Relative change: -0.22
Trend: Bearish bias
Volatility: Low
