September 13, 2022 16:08:55
The much anticipated Ethereum Merge is expected to happen this Thursday, as per the Ethereum Foundation. In simple terms, it’s a technology upgradation that would reduce the blockchain’s energy consumption by 99%.
The upgradation would shift Ethereum from a proof-of-work to a proof-of-stake consensus mechanism. It is expected to transform the scalability of the blockchain. Further, a lesser gas fee and the number of processed transactions will also increase.
In short, the merge would fasten and make the blockchain more energy efficient. Ethereum is the second-largest currency following Bitcoin, with a market capitalization of nearly $200 billion, according to coinMarkeCap data.
A broader market meltdown following the hot U.S. inflation data on Tuesday. According to the Labour Department, the Consumer Price Index (CPI) increased 0.1% from July and climbed 8.3% from the year-earlier period.
This led to the increased bet of the continuation of the aggressive Fed rate hike next week. The market is anticipating a third straight 75bps interest rate hike. This, added to the attractiveness of the U.S dollar.
Investors refrained from riskier assets including digital currencies.
ETH/USD trades near a crucial juncture
The bears remained active near the higher levels. Ethereum witnessed an impressive rally from the lows of $1,003.87 as the price zoomed nearly 103% to the swing highs of $2,028.46. However, this remained a supply zone.
The price tested the ascending trend line that extends from the mentioned level. Buyers made an unsuccessful attempt to trade higher but failed to defend the critical trend line. With a single-day fall on August 26, a fall of 11%, the bulls find reliable support at around $1,420.
However, the price is still hovering below the bullish trend line, which is a litmus test for the bulls.
The RSI momentum oscillator is turning lower, suggesting an extension to the downside. It reads at 46.
A drop below $1,500 could see $1,420 next. The major probability remains negatively biased. If the bulls managed to stay above $1,590 on a daily closing basis, a possibility of a minor recovery cannot be ruled out.
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