On the Coinmarketcap platform, the countdown has begun. In just over 6 days, the transition from Proof of Work to Proof of Stake will be definitively sealed for the Ethereum blockchain. The major crypto event of 2022 may have their say about the price of Ethereum. So, will ETH return to the $2,000 threshold after the merger? Let’s see it all together!
6 days before The Merge!
If the process is already underway, it could be completed by the end of next week. This event, considered by many to be a “game changer”, has had a lot of ink flowing for months. Because if Ethereum has long postponed this update and the sustainability of its blockchain, now is the time for the definitive merger.
In a few days, the Merger will allow the Ethereum blockchain to transition from a “Proof of Work” type transaction validation protocol to a “Proof of Stake” protocol. A feature that the Ethereum blockchain should allow more 1,000 times less energy consumption. But this process will also improve the scalability of the blockchain and the number of transactions processed per second as well as ultimately reduce transaction costs.
If the progress is big and recognized by everyone (or almost), observers are torn as to how much this data should be included in the price. While it is clear that The Merge has somehow been priced into the price of Ethereum, given its outperformance against Bitcoin, some believe that there are still some surprises in the market. While others are more dependent on the status quo.
What about technical indicators?
The technical indicators seem to have the information back an argument for bullish momentum. This is especially true for the stochastic oscillator which indicates that the buyers keep control over the sellers. Despite last week’s strong correction, the price of Ethereum has not broken its medium-term uptrend, seen since last June.
However, Ethereum price may come up against major resistance marked by its 50-day simple moving average (SMA). A bullish reversal above this moving average could set the tone. And to credit all the more, the return over 2,000 dollars. Same for the 78.6% Fibonacci retracement near $1,800. A daily close above this threshold could allow the UA to get the $2,000 back.
Other concrete elements want the expansion to continue. As Glassnode argues, the number of whales is increasing. Therefore, if on May 10, there were 6,174 wallets with more than 1,000 ETH, they are now 6,404. An element that usually consists of a bullish sign. Glassnode estimates that even if the accumulation continues, Ethereum could reach the $3,000 threshold.
The Merge could increase volatility around Ethereum!
If the observers separate themselves sometimes from the existing integration of The Merge on the price of the asset, one thing seems to have a little more consensus: the volatility around the project upstream, but also downstream the merger.
If some feared that trading would be suspended after the merger, the Coinbase platform has just announced that transactions in ETH will remain available during the process. The movements of whales moving large amounts of ETH to the exchanges also lend credence to this hypothesis of high volatility.
At the time of writing, Ethereum is priced at $1,623.45, according to data from the Coinmarketcap platform. Over the past 30 days, Ethereum has posted losses of around 5%. A level that greatly exceeds the market and especially Bitcoin that shows a decrease of 18% over the same horizon. If we focus on the last 60 days, Ethereum recorded a gain of 37% while Bitcoin posted a loss close to 10%. The last few weeks have also been dominated by Ethereum and Bitcoin. Although the mother of cryptocurrencies appears at greater levels seen since 2018, Ethereum is strengthening its rank. The marketcap of ETH now represents more than 20% of the total crypto market.