Ethereum is at crossroads as it stands before strong resistance level
The second largest cryptocurrency in the market is currently at a crossroads, both fundamentally and technically, as the long-awaited Merge update is already imminent and the short-term situation in the market looks ominous.
Ethereum struggles at resistance
Despite the decreasing pressure on the cryptocurrency market, Ether still struggles to break through the consolidation channel it entered back in June. ETH has been trading in the $1,000-$1,200 range for the last few weeks, showing relatively low volatility.
As Ethereum hits $1,210, it faces the aforementioned resistance for the third time since entering the trading range. A successful breakout could become a catalyst for a potential reversal rally for Ethereum, given the potential increase in flows following the successful Merge update.
Consolidation channels after volatile rallies are not unusual as they reflect the market’s desire to “cool-off” and determine the next movement direction, especially if uncertainty prevails among investors.
Fundamental network growth
The Merge Update is one of the biggest factors that could potentially make mass adoption of Ethereum possible, as the network is expected to become more scalable and operational in addition to having increased security.
In addition to the aforementioned improvements, Ethereum, as an asset, will become deflationary as we expect its issuance to decrease. Unfortunately, as time has shown, investors are not yet ready to buy more coins, while knowing that its supply is continuously shrinking.
At press time, Ethereum is trading at $1,227 and is actively trying to break through the upper boundary resistance of the consolidation channel while showing a roughly 3% price increase in the past 24 hours.
