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  • ETH/USD has lost over  3% since the beginning of Tuesday.
  • Vitalik Buterin suggests using  zk-Snarks technology.

Ethereum, the second largest coin by market value, is trading at $220 with a  downside bias. ETH has lost over 3% since the beginning of Tuesday and about 8.5% on a day-to-day basis amid global cryptocurrency sell-off. The coin lost the bullish momentum on approach to $250 and had been sliding down ever since.

Ethereum’s current market value is $22.6B, while the average daily trading volume is registered at $1.7B. After a short period volatility on Monday, both trading volumes and volatility are subdued so far.  

Ethereum’s technical picture

From the intraday perspective, ETH/USD bears stopped short of a strong support level created by a confluence of SMA50 (4-hour chart), 38.2% Fibo retracement for the downside movement from September 1 high, and the short-term upside trendline from September 12 low. A sustainable move lower will signal that the recovery is over, opening up the way towards 211 (SMA100, 4-hour chart) and critical $200.

On the upside, the bulls have to regain $235 handle (50.0% Fibo retracement) to improve their stance. Once this resistance is cleared, the upside may be extended towards $250 where new sellers are likely to appear.

Scalability problem haunts Ethereum network

Meanwhile, Ethereum network continues experiencing scalability issues due to an avalanche of dApps deployed on Ethereum blockchain. Ethereums creator Vitalik Buterin suggests using zk-Snarks technology to solve the problem and potentially scale the network by a considerable amount. He believes that this solution will increase the network’s throughput up to 50 transactions per second with no need to employ such layer-two scaling solutions, such as Plasma or Raiden.

“We can actually scale asset transfer transactions on ethereum by a huge amount, without using layer 2s that introduce liveness assumptions (e.g., channels, plasma), by using zk-SNARKs to mass-validate transactions,” he wrote on Saturday.

Furthermore, he added that zk-snarks requires a lot of computing power, but the technology is likely to improve in the future.

“I understand that the above requires some quite heavy duty computing work on the part of the relayers. But at this point, it’s widely known that optimizing snark/stark provers is super-important, so I’m sure there will be more and more software engineering work going into it over time.”

ETH/USD, 4-hour chart