Ethereum Price Prediction as ETH Forms an Ascending Channel
- Ethereum price strong recovery has faded in the past few days.
- It has formed an ascending channel as focus remains on Ethereum Merge.
Ethereum price retreated on Monday as the recent spectacular rally faded. ETH token is trading at $1,540, which is lower than this month’s high of $1,665, This price is still about 75% above the lowest level in June bringing its total market capitalization to about $185 billion.
Focus remains on Ethereum merge
Ethereum price has staged a major recovery in the past few months as investors focus on the upcoming merge event.
For starters, merge is a process that will combine the proof-of-work (PoW) version of Ethereum with the proof-of-stake (PoS) version known as Beacon Chain.
The goal of this transition is to upgrade Ethereum into a faster and cost-friendly platform for users and developers. It will also make it reduce Ethereum’s carbon footprint since it will not rely on miners. Instead, it will depend on validators, who will confirm new transactions.
History suggests that proof-of-stake networks have better features than those that use proof-of-work. Examples of smart contract platforms that use this technology are Solana, Cardano, Hive, Avalanche, and Cronos among others.
Learn more about Ethereum merge here.
Ethereum’s developers have indicated that the transition will happen soon. Analysts expect that the merge will take place in September when the testing process concludes. After this merge happens, the developers will kick start work on implementing sharding technology. Sharding is a technology that improves throughput by dividing blocks into smaller pieces known as shards.
Ethereum price also rallied as investors believed that the worst in the cryptocurrency industry has already happened. For one, there was no major contagion in the industry following the collapse of companies like Voyager Digital, Celsius, and Three Arrows Capital.
Meanwhile, the Decentralized Finance (DeFi) industry has done well in the past few weeks. The total value locked (TVL) in the industry has jumped to more than $84 billion from this month’s low of $73 billion.
Ethereum price prediction
The four-hour chart shows that Ethereum price made a strong recovery in the past few weeks. This rally gained steam after the coin rose above the important resistance level at $1,278, where it struggled to move above in June and early this month.
Now, it has formed an ascending channel that is shown in black. Indeed, the price is currently slightly above the lower side of this channel. The channel can also be described as a bullish flag pattern. Therefore, there is a likelihood that the coin will resume the bullish trend as investors target the upper side of the channel at $1,660.