ETH price made a clear trend change and aims for the $3,800 level after traders’ anticipation of the upcoming Merge lures the bulls back to the market.
The week-long uptrend in the cryptocurrency market has begun to awaken bullish crypto investors and the successful March 15 launch of the Ethereum “merge” on the Kiln testnet has the community excited about the upcoming switch to proof-of-stake (POS).
Data from Cointelegraph Markets Pro and TradingView shows that since the successful launch on Kiln, the price of Ether has climbed 25% from $2,500 to a daily high at $3,193 on March 25 as traders look to lock in their positions ahead of the merge.
Here’s a look at what analysts in the market are saying could happen with the price of Ether as the merge approaches and how the switch to POS could affect its price long term.
A clear breakout from the downtrend
The turnaround in Ether price over the past couple of weeks was succinctly addressed by crypto analyst and Justin Bennett, who posted the following chart highlighting the trend reversal that has occurred.
“Ether first higher high since early Nov. 2021. Probably nothing.”
The merge will be a bullish development
A deeper analysis of the effects the upcoming merge for Ethereum will have on its price was discussed by analysts from the independent global macro and crypto research house MacroHive, who noted that the merge “will have bullish implications for Ether.”
According to MacroHive, “the prospect of being able to make a passive return on staked Ether will attract more investors into the space,” while the transition to proof-of-stake “will reduce Ethereum’s energy consumption by 99.95%.”
This, in turn, wilhelp to attract more institutional money into the Ethereum ecosystem as the Environmental, Social and Governance (ESG) concerns “around the energy consumption of mining/proof-of-work are mitigated.”
The merge will also have a notable impact on the circulating supply of Ether as the net issuance will undergo a significant drop-off once completed as block rewards are replaced with Ether staking yields.
“This, coupled with the ongoing Ether burning should make Ether deflationary and this should be bullish overall.”
Related: Crypto rallies to $2T market cap as institutions signal readiness to enter
Merge could mirror Bitcoin halvenings
A final bit of insight into the effects of the upcoming merge was put forth by options trader and pseudonymous Twitter user McKenna, who posted the following tweet likening the effects of the merge to that of Bitcoin halvenings.
The overall cryptocurrency market cap now stands at $1.997 trillion and Ether’s dominance rate is 18.7%.
This article was originally published on Cointelegraph by JORDAN FINNESETH