Ethereum Merge

Ethereum received $16 million in inflows, according to Coinshares data. Last week, it received $159 million in inflows over the last seven weeks. Institutional investors are pouring money into Ethereum-based cryptocurrency funds, which have seen positive inflows for seven weeks and are up 52 percent in a month.

Even though sentiment has improved, trading volumes remain low, at $1.1 billion for the week, compared to the $2.4 billion weekly average for the entire year, according to the report. According to experts, the low participation is seasonal, as a similar pattern was observed in previous years.

Furthermore, short bitcoin investment products saw a record outflow of $7.5 million for the second week, bringing the total to $8.5 million. It indicates that investors believe bitcoin prices have fallen.

Traders Getting Ready

In speculation of the highly anticipated Merge, cryptocurrency traders are preparing to “buy the speculation and sell the news,” according to Glassnode, a blockchain analytics company. According to the analytics firm, the ETH options and futures market is in “backwardation,” which occurs when the current price of an asset is greater than the prices trading in the futures market.

Traders may have positioned themselves in anticipation of the Merge being a “buy the rumor, sell the news” event, according to the company, as both the futures and options markets have been in a bear market since September.

What’s Driving an Uptrend in Price?

According to reports, Ethereum’s Merge transition from a proof-of-work (PoW) consensus system to a proof-of-stake (PoS) blockchain will be completed in late September 2022. Vitalik Buterin, the co-founder of the Ethereum blockchain, has already stated his expectations for the Merge.

According to The Crypto Basic, Buterin stated that Ethereum would be only about 55% complete after the Merge. This enhancement also allows Ethereum to process transactions more quickly and cheaply, which is another innovation. Following the Merge, the Ethereum network will be capable of processing more than 100,000 transactions per second. Furthermore, the PoS technology will make Ethereum 99 percent more environmentally and energy efficient.

This update is eagerly anticipated by the cryptocurrency and blockchain industries, and many investors have expressed interest in the asset upgrade. The recent Ethereum blockchain inflows, according to Coinshares, are related to the upcoming Merge Upgrade and have influenced many investors’ perceptions of the asset.

It has unavoidably affected the price of ETH. However, the jury is still out on how the Merge will affect Ether’s price in the long run. In a recent interview, Ethereum creator Vitalik Buterin expressed his continued optimism for ETH’s long-term prospects, predicting that the narrative would likely remain favorable after the Merge.

Ethereum Price Chart

Ethereum Price Chart – Source: Tradingview

Ethereum Daily Technical Levels

Support Resistance

1647.13 1733.20

1614.20 1786.34

1561.06 1819.27

Pivot Point: 1700.27

Ethereum Technical Outlook

Despite a recent rally, the price of Ethereum (ETH) is showing signs of a minor bearish correction. The ETH/USD pair is now trading at $1,690 after failing to break through the $1,755 resistance level. The 4-hour timeframe shows that ETH has entered the overbought zone, triggering a bearish correction.

At $1,662, ETH has already completed a 23.6 percent Fibonacci retracement. If this level is breached, the ETH price will fall to $1,600. (Fibo level of 38.2%). A 50-day exponential moving average will also be present to support the ETH price near $1,600; however, if ETH breaks lower, it may fall to $1,550 or $1,506 levels. On the upside, the triple top pattern at $1,755 will most likely act as resistance. Good luck!

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