Could Testing Ethereum Consolidation Raise the Price?

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  • Ethereum Although its price tends to move higher frequently, it is not performing well due to its correlation with Bitcoin.
  • Investors can expect Ethereum to rise 30% in an optimistic scenario, showing the desired performance.
  • A four-hour candlestick near $1,701 will create a lower low and invalidate the bullish argument.

Since the Bitcoin price has been consolidating for a while, the Ethereum price has not been very active for a while. The price action experienced during the day helped to record a rise and contributed to the recovery of altcoins as well.

Regardless of short-term volatility, Consolidation is the hottest topic for Ethereum and why it appears to be a better investment option over Bitcoin in the coming cycle.

What is Ethereum Consolidation?

To summarize, ‘merge or The Merge’ is a planned upgrade to the Ethereum blockchain. As a result of this upgrade, the blockchain will transition from a proof-of-work (PoW) to a proof-of-stake (PoS). The main reason for this upgrade is to improve ‘scaling’, which is seen as a major problem, while maintaining the decentralization and security aspects of blockchain.

While there have been multiple delays in the past, the developers think this upgrade should happen in August.

As announced by an Ethereum developer, Ethereum’s testnet Ropsten will be merged, meaning the chain will switch to PoS on June 8. After Ropsten, Merge will take place in Sepolia and then in Goerli, with a two-week buffer period between each upgrade.

Once the tests on these networks are confirmed to be running smoothly, the mainnet will also complete its migration. Ethereum developers and team hope this happens in early August.

What if the transition to PoS happens today?

While merging excites many for fundamental reasons, others Ethereum price He continues to speculate about its effect on him. “korpi87”, a Twitter user, expressed his views on what would happen if the Merge took place today.

User claims there are some facts in PoW and PoS such as ETH issuance, daily fee revenue and percentage of fee revenue burned due to EIP-1559. After that, the assumption of the number of ETH sold by miners and stakers needs to be included in the equation.

The Twitter user then goes on to summarize that if the Merger happens today, the total daily selling pressure of currently $10 million would be replaced by $8 million in buyout pressure. From a fundamental perspective, the shift in the narrative from oversold pressure to overbought pressure will positively impact Ethereum price.

Technical data, currently tight due to Bitcoin, will greatly benefit from this imbalance of buying and selling pressure and will skyrocket the Ethereum price.

Explosive Moves in ETH Price

Ethereum price has produced a series of lower lows and equal lows around the $1,700 support level since May 16. This consolidation, coupled with the bullish prospect of the consolidation, could help ETH fly.

Separating the fundamentals from the technical one suggests an equal high at $2,020 and Ethereum price could rise at least 12% to sweep the equal high at $2,020. If the buying pressure continues to build, ETH will begin to rally the remaining liquidity above the lower high swing points formed until May 16.

Assuming Ethereum price hits the May 16 high at $2,164, a 20% rise would be possible. While this scenario is bullish, in a short-term outlook this level will likely be where bullish caps are capped for ETH.

Should bitcoin price hit the $35,000 level, investors can expect ETH to follow suit and label the higher timeframe resistance barriers at $2,341 and $2,412, respectively.

Ethereum

Regardless of the optimism surrounding the consolidation, sometimes fundamentals fail to translate into price action, especially if the narrative doesn’t match. In such a case, if Ethereum price produces a four-hour candlestick below $1,701, it will create a lower bottom and invalidate the bullish thesis.

This development could result in Ethereum price revisiting the $1,543 support level.

Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.


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