Ethereum (ETH/USD) price had a strong performance in 2021 as it did better than Bitcoin. It jumped by 400% during the year as its total market capitalization spiked to more than $500 billion.
Why did ETH jump?
Ethereum is a blockchain platform that enables developers to build decentralized applications (dApps) of all types. It can be compared to Android, the free open-source platform created by Google. Developers can build all types of apps and games on top of this platform.
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Ethereum has been used to build some of the best decentralized applications in the world. For example, its app formed the foundation of Shiba Inu, the breakout star in 2021. It was also used to build Aave, Decentraland, and Uniswap.
Ethereum price rallied in 2021 as the blockchain industry went mainstream. For example, the decentralized finance (DeFi) industry did well as its total value locked rose to more than $250 billion. Similarly, other industries like the metaverse and non-fungible tokens (NFTs) also did well.
However, Ethereum also faced some important challenges in 2021. As these industries did well, Ethereum’s network became clogged, leading to higher costs of transactions and slow speeds.
As a result, Ethereum faced substantial competition as a new crop of Ethereum-killers took shape. Leading the way were well-funded platforms like Binance Smart Chain (BSc), Terra, Solana, and Polygon. Still, because of its pole position, Ethereum managed to maintain previous and new projects.
Looking ahead in 2022, the biggest catalyst for the ETH price will be the merge of the Ethereum mainnet and the beacon chain proof-of-stake network. After the merge, new ETH tokens will be minted using a consensus among delegators.
By so doing, the network will abandon its proof-of-work, which will make it faster and more user-friendly. As a result, it will be at a better position to compete with the other popular Ethereum-killers.
Ethereum price prediction
The weekly chart shows that the ETH price has done well in the past few months. Recently, however, the bullish trend has lost momentum. It is trading at $3,700, which is about $1,000 below its all-time high.
Still, a closer look shows that the coin is still above the 25-week and 50-week moving averages. It is also above the important support at $1,398, which was the highest level in December 27th. The Relative Strength Index (RSI) has also moved slightly below the overbought level.
Therefore, the Ethereum price will likely keep rising as bulls target the key resistance at $5,000. The catalyst will be the ETH 2.0 upgrade.
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Source: https://invezz.com/news/2022/01/01/ethereum-price-prediction-eth-forecast-for-2022/