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Ethereum Price Falters Around $430 as ETH2 Testnet Experiences Outage

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  • Ethereum’s price has begun to falter after surging higher late last week.
  • The cryptocurrency trades at $430 as of this article’s writing, which is a few percent below and a few percent above the local highs and lows, respectively.
  • ETH is flat in the past 24 hours, trading down by a negligible 0.15%.
  • The stagnation in the value of the leading cryptocurrency comes as the Ethereum 2.0 (ETH2) testnet has experienced an outage.
  • It is unclear if the price action and outage are correlated, but ETH2 is a fundamental driver.
  • Analysts remain cautiously bullish on Ethereum in spite of the outage.

Ethereum 2.0 Testnet Suffers Outage

Earlier this month, Ethereum developers rolled out the final public testnet for the long-awaited ETH2 upgrade. The upgrade, which will be rolled out in multiple parts over a year or 2, is set to change how ETH operates; with ETH2, staking and sharding will be implemented, allowing for a network that should is faster and more decentralized.

The testnet has been dubbed “Medalla,” and it operated fine for a number of days.

On August 14th, though, reports began to spread online that something went wrong with Medalla.

In a post that rose quickly to the top of the Ethereum subreddit, a user shared the chart below. It shows that the “participation rate” of Ethereum validator nodes, which earn rewards for “staking” their coins, had plunged from ~75% to ~5%, then to 0%.

It was later explained by Preston Van Loon of Pryismatic Labs that there was an outage due to a bug in how Prysm clients track time:

“At approximately 17:30 UTC, @terencechain observed their clock was adjusted to 4 hours into the future. Shortly after, our pagers started going off, and then user reports started to flood in on discord. Something was really wrong. In the Medalla testnet, validator participation plummeted faster than $YAM. From 75% to nearly 5% or less. It was all hands on deck for the @prylabs team.”

Fixes have since been implemented, though developers are still trying to find the root cause of the event. It’s important to note that this is just an issue with one client, but since it was the most-adopted client, most validators were affected.

What’s Next for ETH?

In terms of ETH’s price action, analysts think there is heavy resistance ahead but remain cautiously optimistic. As reported by Bitcoinist previously, one trader said on the matter:

“ETH / USD: Weekly close looking completely nuts right now, I guess $475 would be the next major level of resistance. Probably expect a pullback to around $400 level before the end of the month to confirm this level as support but overall this is looking more bullish than ever.”

Ethereum

Image Courtesy of Cactus. Chart via TradingView.

At the end of the day, though, Ethereum may just follow the directionality of Bitcoin.

Photo by Florian Olivo on Unsplash

Price tags: xbtusd, btcusd, btcusdt
Charts from TradingView.com
Ethereum Price Falters Around $430 as ETH2 Testnet Experiences Outage



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Ethereum

Ethereum London upgrade launches on testnet as 100K staked in a day on Eth2

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Ethereum’s forthcoming London upgrade, containing the highly-anticipated Ethereum Improvement Proposal (EIP) 1559, has been deployed on the Ropsten testnet.

Following the June 24 launch on Ropsten, London is now expected to progress through Ethereum’s Goerli, Rinkeby, and Kovan testnets at roughly weekly intervals — from which point the Ethereum community expects a date for mainnet deployment to firm up.

The new upgrade will see transaction fees burned. According EIP-1559 tracking website, Watch the Burn, roughly 88,500 testnet ETH nominally worth $177.6 million has been burned on Ropsten over the day since London’s deployment.

The high rate of Ether being burned on Ropsten has reignited discussion regarding whether EIP-1559 will render Ethereum deflationary — where more ETH is destroyed than new supply enters into circulation — and what this could mean for Ethereum’s price moving forward.

However, EIP-1559 is not the only upgrade that the community is looking forward to from London, with David Mihal of CryptoFees describing EIP-3074 as “fixing one of Ethereum’s most overlooked security issues” to do with approvals.

Related: A London tour guide: What the EIP-1559 hard fork promises for Ethereum

Coincidentally or not, crypto data aggregator, CryptoQuant, identified that 100,000 Ether had been deposited into Eth2’s staking contract around the same time as the launch, worth roughly $200 million.

CryptoQuant also noted that more than 5% of ETH’s supply is currently locked in staking worth approximately $11.75 billion.