Ethereum prices are down six percent a day before the all-important Merge upgrade. According to trackers, ETH is dumping on a strong USDT, retracing from this week’s highs of around $1.8k.
Despite the contraction, traders are upbeat, expecting prices to snap higher in alignment with the performance of the first half of September. Technically, the Ethereum price appears to be bottoming up.
Although buyers are not out of the woods just yet, there are encouraging signals that bulls may make a flow back and pump prices to new highs. The immediate resistance level lies at $2k and is a critical reaction point marking August 2022 highs.
ETH Mission to Drop after Ethereum Merge
Traders are anchoring their hopes on the Ethereum Merge. The upgrade will be a basis for several enhancements in Ethereum. However, in the beginning, Ethereum’s energy requirements will drop by 99 percent as validators take over from miners operating energy-intensive rigs.
At the same time, the trading community expects the reduction in ETH emissions combined with the ultra-high demand for block space to help steady prices, pumping them to new highs. It is anticipated that daily ETH emissions will drop by around 90 percent, a development that will make ETH scarcer.
On average, Ethereum’s block utilization rates stand at 99 percent. It means there is demand for transaction addition in every block, giving validators an upper hand in charging network fees. Eventually, considering the constantly high block demand and low “fuel” in circulation, ETH prices may increase.
Ethereum Price Analysis
ETH prices are down six percent in the past trading day. However, the trend is northwards, and buyers are upbeat about what lies ahead. Specifically, because of fundamental factors, a successful transition may thrust the current ETHUSDT price formation to bullish, a net positive.
Thus far, ETH is pulling back from $1.8k posted mid-last week. The primary support lies at $1.4k, marking the 61.8 percent Fibonacci retracement level of the June to August 2022 trade range. As long as prices are above this mark, aggressive traders can load the dips, targeting $1.8k in the short term. Taking a more conservative approach, traders can wait for a clean breakout above $1.8k, or last week’s highs, before initiating longs, targeting $2k in a buy trend continuation formation.
Sharp losses below $1.4k confirming yesterday’s losses diffuses the upside momentum, paving the way for sellers to press lower, targeting $1.1k.
Technical charts courtesy of Trading View
Disclaimer: Opinions expressed are not investment advice. Do your research.
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