Ethereum price is close to reclaiming the lost territory during yesterday’s bearish move while Bitcoin is slowly crawling towards $19,000. The second cryptocurrency by market capitalization is about to experience a major event with a high potential to act as a bullish catalyst, “consolidation.”
At the time of writing, Ethereum price is trading at $1,570 with a gain of 3% over the past week. With Bitcoin being pushed lower by a fresh drop, market participants see ETH as a potential savior for the sector.
Will bulls or bears control the price of Ethereum?
Given its importance, many experts are speculating about the possibility of a “consolidation,” moving from Proof of Work (PoW) to Proof of Stake (PoS), to support the relief rally in the market. Others believe the event will be ‘buy the rumor, sell the news event’.
The latter often occurs when there is a widely anticipated sector event that leads to a rally followed by a sudden crash shortly after the noise has dissipated. Next week, the US Federal Reserve will publish the Consumer Price Index (CPI), a measure used to measure inflation.
Economist Alex Krüger claims that the CPI reading may provide support for upside risk assets. In the past, cryptocurrencies have tended to the upside after this event. Together with the “consolidation”, the price of Ethereum appears set for upside swings. expert He said About the potential setup for ETH traders:
If ETH USD trading is directional for consolidation, you will probably want to go long in the event with stops just above the August lows and pick up the 1700 break to take the price into the 1800-2100 range.
Whether ETH price can sustain the bullish momentum after the “consolidation,” Krueger believes that this will depend on the strength of the price action. If Ethereum can run out of action, the price may be able to turn key resistance levels into support.
Could ‘merge’ spark a new crypto bull?
Despite its importance, Krueger believes that “consolidation” may not be able to drive the cryptocurrency market to price discovery. Older financial markets are trending alongside cryptocurrencies. This is the most important upper resistance just two days before this event. Krueger added:
The merge essentially improves the attractiveness of ETH by reducing power consumption and most importantly improving tokens (…). It likely won’t be enough to start a bull market on its own. Need a bull market in stocks for that. For me, the idea of separating $ETH is what I call a pipe dream.
If stocks rebound with CPI printing, crypto will find further support. However, macro conditions may remain unfavorable for the rest of 2022 as Federal Reserve Chairman Jerome Powell has hinted.
Offering an opposite thesis, in the video below, our Managing Editor Tony Spilotro looks at current market conditions and why Bitcoin’s decline in dominance may signal a new Altcoin season. This could have positive effects on the price of Ethereum heading for a “merger”. take a look.