Ethereum has taken the spotlight in the crypto market this week, as the long-awaited London hard fork occurred on August 5, introducing a new Ethereum Improvement Proposal (EIP) that has changed the network’s transaction fee mechanism. Ether surged the day prior to the upgrade and has even reached $2,800 for the first time since early June. Decentralized finance tokens including Uniswap (UNI) and Aave (AAVE) followed in ETH’s footsteps and rallied as well.

Top headlines in the crypto market this week:
- JPMorgan is reportedly offering a private Bitcoin fund to its wealthy clients, in a passively managed fund in partnership with NYDIG.
- US President Biden’s new infrastructure bill could extend surveillance on cryptocurrencies from the government.
- US SEC Chair Gary Gensler calls for more resources to regulate cryptocurrencies.
- CFTC Commissioner says the SEC has no authority over the regulation of digital assets.
- Ripple Labs granted access to Binance documents in SEC securities $1.3 billion lawsuit.
Ethereum price rallies on London hard fork
Ethereum has just witnessed history, as the London hard fork introduced new proposals, including one that presented a new base fee structure of how transactions are processed on the blockchain.
Ethereum price has jumped ahead of the major upgrade, gaining around 10% on August 4. The London hard fork will introduce EIP-1559, a base fee burning mechanism that would reform the transaction fee market.
EIP-1559 will burn a portion of each transaction, which could decrease the supply of Ether. If more Ether is burned than those that are issued, then Ethereum could face deflationary pressure — which could boost the ETH price.
Prior to the upgrade, speculators were debating whether the London hard fork would be a “sell the news” event. Moments after the upgrade went live, the fear set in and Ethereum dropped to lows of $2,526 before bouncing back and eventually surging above $2,800.
Currently, the Ethereum network is burning around 2.3 ETH per minute. Ethereum price recently witnessed a death cross, as the 50-day Simple Moving Average (SMA) plunged below the 200-day SMA.

However, a golden cross could soon appear as Ethereum rallies higher, which could further propel the second-largest cryptocurrency by market capitalization.
The next target for Ethereum appears to be the 50% Fibonacci extension level at above $3,000. The Ichimoku Cloud indicator also supports the bullish thesis, as ETH managed to surge above the red cloud and the asset could be trending upwards.
For Ethereum price to effect the target of $3,000, ETH would ideally need to close above the 38.2% Fibonacci extension level at $2,737.
DeFi tokens follow Ethereum’s lead
Decentralized finance token Aave also benefited from the recent bullish momentum, surging to $381, a high not seen since June 7. It is essential to note that AAVE was able to slice above the 200-day SMA, which has acted as stiff resistance for the token.

Should Aave settle above this level as support at $359, the DeFi token could target a higher high, tagging the 50% Fibonacci extension level at $417 next. If selling pressure increases, then Aave could be sent to retest the 100-day SMA at $340, before eventually falling down to the 23.6 Fibonacci extension level at $286.
Uniswap price action paints an interesting picture as it appears to have formed a double bottom, signaling an upswing. The August 5 candle suggests that UNI bulls are looking to secure the 100-day SMA as support, and is currently faced with a tough hurdle with the 200-day SMA.

Slicing above the 200-day SMA could mean that Uniswap is ready for a fresh rally, given by the double bottom chart pattern should UNI price stay above $23.34. The DeFi token would see support at the neckline of the governing technical pattern, before retesting the 50% Fib extension level at $21.94 should selling pressure increase.
Bitcoin exchange outflow tells an interesting story
Bitcoin price is back above $40,000 despite Ethereum taking most of the spotlight. Long-term holders continue to hoard the leading cryptocurrency, as an increase of BTC is held dormant. This week, the market has seen one of the most significant outflows of the bellwether digital asset from crypto exchanges.
This is an interesting note as previous bull markets were ignited when the supply of Bitcoin held by long-term wallets was increased consecutively for months. This means that there has been accumulating in the past couple of months.
The Ethereum London hard fork has taken the crypto market by storm, and more exciting upgrades await as the network gets ready for ETH 2.0 In the meantime, risks still exist in the market, it’s essential to be prepared and manage your risks as cryptocurrencies remain volatile.
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