ETH may consolidate as excitement at Merge wanes, expert says


Following a surge in Ethereum (ETH) prices last week, the cryptocurrency may now be in a consolidation phase, said the chief investment officer of asset management firm IDEG.

In a report shared with UKTN on Monday, the report’s author Markus Thielen said that while he was optimistic about ETH prices six weeks ago, he has now become “cautious.”

The thesis is based on macro factors and price analysis of the cryptocurrency, noting that the Fed is still continuing to “step up its Quantitative Tightening (QT) program that drains liquidity” while noting that ETH prices are experiencing technical resistance. had reached around $1,800.

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The asset manager also noted that this is because Ethereum has seen a 47% drop in network revenue, a drop in total locked-down volume (TVL), and there has also been a drop in stablecoin market cap, with USDC taking $1. .1 billion in outflows over the past week.

Speaking to UKTN on Tuesday, IDEG chief investment officer Markus Thielen noted that the recent price rally has not been supported by a change in fundamentals.

Thielen also believes that the hype surrounding the “Ethereum Merge” is now on a downward trend, illustrated by recent Google search data.

Source: “Ethereum Merge” Google Trend Results: Google, IDEG Research.

Thielen suggested that this “Merge fatigue” indicates that ETH is set for a consolidation period ahead of the upcoming Merger on September 19. But Thielen added that this could open doors to more buying opportunities:

“Ideally, a drop to the end of August would set us up for another great entry level.”

Related: Pro Traders Can Use This ‘Risk Averse’ Ethereum Option Strategy to Play the Merge

Thielen also commented on the interesting correlation between ETH price and Ethereum Merge Google search results that is currently in play:

“It’s a good indicator of sentiment and interest, but it will eventually break down and become irrelevant. Nevertheless, it may provide some insight into the timing of Ethereum’s current price change in the event.”

After the merger, Thielen believes that the ETH price will mainly be influenced by how quickly the adoption rate increases:

“While gas prices may remain the same, the acceptance curve may not initially rise as fast as many hope. This could make ETH somewhat valued when measured in pure cash flow terms.”

ETH is currently priced at $1,587 at the time of writing, down 6.24% in the last 24 hours.

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