Ethereum Holds Steady Above $1,600 Amid Scaling Proposals and Whale Activity

Ethereum (ETH) is trading above $1,600 with a 1.7% gain, boosted by whale activity and a proposal from Vitalik Buterin to enhance scalability via RISC-V architecture. However, a decline in network usage prompts concerns about long-term viability amid competition from layer-2 solutions.

Ethereum (ETH) is currently trading at a value above $1,600, marking a 1.7% increase in the past 24 hours. This price movement is supported by robust on-chain activity from significant investors and a bold scalability proposal from co-founder Vitalik Buterin.

Vitalik Buterin has proposed a substantial redesign of the Ethereum Virtual Machine (EVM) to implement RISC-V architecture, aiming to address current scalability challenges. This proposal intends to maintain fundamental Ethereum elements while enhancing execution speed and efficiency, potentially improving it by up to 100 times.

Buterin identified several issues hindering Ethereum’s scalability, including zero-knowledge EVM proofing and data availability concerns. He emphasised that adopting RISC-V could be crucial for generating more efficient execution layers, which is essential for maintaining Ethereum’s competitiveness.

Technical analyses indicate a positive trend for Ethereum, with the Relative Strength Index (RSI) nearing neutrality, suggesting underlying bullish momentum. For continued recovery, Ethereum needs to maintain prices above $1,700, with key resistance anticipated at $1,861, while corrections could lead to testing support levels around $1,449.

Whale activities indicate a shifting market sentiment, illustrated by a recent withdrawal of 1,897 ETH ($3 million) by a notable entity from Bitget exchange. This particular whale has withdrawn a total of 3,844 ETH ($6.51 million) since early April, reflecting growing confidence in Ethereum’s value.

Despite recent price recoveries, Ethereum’s network usage metrics reveal a troubling trend. Layer-2 scaling solutions have substantially reduced transaction fees, indicating a decline in base level activities. This trend raises concerns over Ethereum’s long-term value proposition, especially against high-throughput competitors like Solana and Sui, potentially affecting market dynamics going forward.