Judging from the recent success of the latest Ethereum 2.0 Testnet - dubbed Zinken - it seems that there is a possibility that we might be getting ETH 2.0 as a Christmas present this year!
The Zinken testnet, birthed from a failure of the previous Spadina testnet, has gone through and finalized without a hitch;
At first, this might not seem like a great deal - but let me take you through some history on ETH 2.0 to unpack why this is, probably, the biggest news we could have hoped for on the road to ETH 2.0.
The Ups and Downs of ETH 2.0
ETH 2.0, also known as Serenity, was expected to change the game for Ethereum. It involves the process for Etheruem to migrate over from a resource-intensive Proof-of-Work (PoW) blockchain to a more efficient Proof-of-Stake blockchain.
With the switch to PoS, it is expected that the throughput of the Ethereum network will significantly increase, allowing for more transactions per second with a much lower GAS fee. To put it in perspective, if ETH 2.0 were live during the DeFi summer - we would never have been paying over $50 to interact with DeFi smart contracts.
If you have been following the development for ETH 2.0 - it WAS expected to be launched by the Summer;
As we are now sitting near the Winter months of 2020, you’re probably aware of the fact that ETH 2.0 is still not with us. Instead, the expected release date seems to be continually changing over these past few months.
It is important to note that an official release date was never mentioned - these were all just rough estimates of when ETH 2.0 was expected. Instead, it seems that the developers needed a little more time to make sure that they had all of the technical details ironed out fully through a series of testnets.
The first, and probably the most important testnet, was Medalla. This was supposed to be the “final” testnet, although there were two more after it, and it was one of the most important because it was the first public testnet.
The Medalla testnet went live at the start of August 2020, and clients such as Prysm, Teku, Nimbus, and Lighthouse all participated in releasing their software to hook up to the testnet. The Medalla testnet was supposed to provide a platform to test a fully functioning ETH 2.0 blockchain with the new staking features implemented. Thus, the testnet had to be public with enough nodes participating in making it a reliable testnet.
Upon the release of Medalla, over 20,000 nodes decided to participate as around 650,000 ETH (fake ETH) was staked. Luckily, it seemed that 20,000 nodes were enough to make this testnet a success;
Since launching, the number of nodes (validators) has increased from 20,000 to over 70,000 - showing the success of the testnet for ETH 2.0 working fully in action;
However, not all of the ETH 2.0 testnets went as smoothly as Medalla (even Medalla had a few problems which were quickly resolved).
After Medalla, the next testnet, dubbed Spadina, went live at the end of September, and it was supposed to help with giving on-boarding stakers a dry run in the deposits and genesis part of the transition. It was supposed to run for 3-days alongside the Medalla testnet. However, things did not run so smoothly for Spadina.
Due to its low participation rate and minor client errors, the Spadina testnet failed to reach “finality.” As a result, Ethereum development teams decided to do one last “final rehearsal” before launching ETH 2.0. This final testnet was called Zinken - and it launched today!
Why Is Zinken So Important?
On its own, Zinken is not that important. However, it marks the end of a series of testnets before Phase 0 of ETH 2.0 will launch.
Like Spadina, Zinken was designed for testing the first ETH 2.0 block on the new chain - also known as the genesis. We finally have some excellent news as Zinken launched without any problems.
Although Zinken will continue to run for a few days, this puts an end to all the ETH 2.0 testnets, and the next station is the deployment of ETH 2.0 itself.
As a result, some testnet evangelists are expecting ETH 2.0 to be launched by Christmas;
The launch of the Zinken testnet was live to see with top Ethereum developers at the party - including Vitalik Buterin himself;
To add further to the excitement - Prysmatuc Labs - the developers behind the Prysm ETH 2.0 client - announced that they have officially released the Eth2 Client Web Interface. This is the first official ETH 2.0 client with a dedicated web portal designed to make staking simpler through a graphical user interface;
The masses don't know what's coming yet, even ETH fans themselves.
One thing that is troubling me slightly about the latest news is the fact that ETH fans do not seem to care - or they do not understand the extent of what happened today. I took a look at some of the upvotes on the news regarding the Zinken testnet success, and this is what I found;
As you can see, on both the r/ethtrader and r/eth subreddits, there is literally nobody talking about the imminent release of ETH 2.0 after the Zinken testnet started up successfully. It seems that either nobody cares or nobody believes that this would be the last testnet.
Hunting for topics that people are interested in upvoting, I just seem to find memes;
It is quite funny how even the Eth subreddits themselves do not seem to be excited about the importance of the final subreddit - showing that the real hype for ETH 2.0 has still yet to start!
The hype for ETH 2.0 is still not here yet, and it’s likely because it has been delayed so many times in the past - so few are expecting it to be anytime soon.
However, this time it seems that the developers are pushing their hardest to deliver ETH 2.0, and, as the new suggests, Zinken was the final testnet before ETH 2.0 goes live.
Still, the price for Ethereum is yet to respond to this action.
How High Can ETH Price Go?
So, the all-important question - How high can ETH price go?
Well, this all depends on your timeframe, of course. But I want to focus on where Ethereum can go over these next few months in the lead-up to 2021 and the launch of ETH 2.0.
Looking at the chart above, we can see that Etheruem did perform quite well during July and August after it broke above an ascending triangle pattern and started rampaging higher to reach the $490 level at the start of September.
Unfortunately, the Bitcoin price drop seen at the start of September caused Ethereum to roll over and head lower - with the rest of the cryptocurrency markets. It then started to form a symmetrical triangle pattern toward the end of the month.
This new consolidation pattern was recently penetrated this week as ETH pushed higher above the upper boundary to reach the $395 resistance (bearish .5 Fib Retracement) yesterday.
Instead of focusing on how high ETH can go - let me highlight the vital areas of resistance that the buyers will have to overcome.
First, we have the initial $400 level to break; this shouldn’t cause too many problems for the bulls. Above this, resistance lies at $414 (bearish .618 Fib), $442 (bearish .786 Fib), and $475 (1.414 Fib Extension). Before hitting $500, there is additional resistance at $490 to break.
Once the ETH 2.0 mania kicks in, breaking above $500 would be quite an easy feat for Ethereum. In fact, I am confident that once the ETH 2.0 hype starts to pick-up - ETH is likely to soar past all the resistance between $500 and $600.
In all honesty, if the ETH 2.0 hype does start to build in November - we can expect Ethereum to easily reach above the resistance at $600 by the end of the year. It is likely to continue further higher toward $675 (long term bearish .786 Fib Retracement). This will be a certainty once the Ethereum development team set a definite date for the launch of ETH 2.0.