Ethereum price remained in a tight range as focus remained on the upcoming merge event and the soaring US inflation data. It was trading at $1,610 on Wednesday, which was slightly lower than this week’s high of $1,796. Other cryptocurrencies like Bitcoin and Ripple also pulled back following the latest US inflation data.
The main catalyst for ETH price is the upcoming merge, which will happen on Thursday. It will transition Ethereum from a proof-of-work to a proof-of-stake network in one of the biggest transitions on record. As a result, Ethereum will start using validators instead of miners. As a result, it will become a more clean blockchain than it is today.
At the same time, ETH holders will be able to stake their coins and make passive money. Already, users stake billions of dollars and earn rewards in the Beacon Chain. After the upgrade, developers will embark on another lengthy process of upgrades that will boost its speed and lower gas fees. One of the key upgrades will be sharding, which is a technology that is used by companies like Elrond and Zilliqa.
So, how will Ethereum price react after the merge? There are two potential scenarios of what will happen after the merge. First, ETH coin could resume the bullish trend as its demand rises. Second, since the merge has already been priced in, there is a likelihood that the coin will resume a bearish trend as buyers wait for another catalyst.
ETH price pulled back sharply after the US published strong consumer inflation data. These numbers sent a signal that the Fed will continue hiking interest rates in the coming months. Analysts expect that the bank will hike by 75 basis points in its upcoming meeting followed by 0.50% in the final two meetings of the year.
On the four-hour chart, we see that Ethereum price nosedived on Tuesday after the latest inflation data. As it fell, it moved below the lower side of the ascending channel shown in blue. It also moved below all moving averages while the awesome oscillator has moved below the neutral level.
Therefore, the coin will likely continue falling after Ethereum Merge. If this happens, the next key level to watch will be at $1400. A move above the resistance at $1,700 will invalidate the bearish view.
This post was last modified on Sep 14, 2022, 10:03 BST 10:03