This week's biggest news in the crypto industry was the completion of Ethereum's update, Merge. However, it failed to bring the market out of the bear grip. In the last seven days, Ethereum has plunged over 13 per cent. Bitcoin, the largest digital currency by market capitalisation (m-cap), is down nearly 5 per cent.
Almost all the major cryptocurrencies, including Binance Coin (BNB), XRP, Cordano, and Solana, were down over 5 per cent on Friday.
“The Merge may not have any immediate impact on the price action of ETH now as it takes some time for the market participants to digest such significant events,” Edul Patel, CEO and co-founder of investing platform Mudrex, said.
After the Merge, Ethereum transitioned from a proof-of-work (PoW) mechanism to a proof-of-stake (PoS) mechanism. The transition is expected to cut the energy consumption for minting digital tokens by 99.5 per cent.
“It [Merge] will form the basis for a range of future updates and enhancements to the Ethereum system. On the other hand, the Ethereum network updates have repeatedly been accompanied by unexpected technical problems, and this time not everything may go smoothly,” Johnny Lyu, CEO of KuCoin, said.
On Friday, Ethereum was trading at $1,467, according to coinmarketcap.com.
“ETH's next primary support level is $1,400, while the immediate resistance is $1,500,” Patel added.
‘Prices may rise despite the bear market'
However, according to some experts, Ethereum's price may rise soon.
“There's a ‘Triple Halving' of ETH supply and the asset is now deflationary,” said Parth Chaturvedi, crypto ecosystem lead at a crypto trading app, CoinSwitch.
In the crypto market, a currency is deflationary if its supply is expected to dwindle. This leads to a fall in supply. Due to higher demand, the prices surge.
Minal Thukral of CoinDCX had similar views.
“As the chain will now run-on locked ETH, the net amount of ETH in supply/circulation is decreasing and we should see that getting priced in the times to come,” Thukral said.
What to expect next?
“If ETH fails to hold these levels, we may see ETH test the $1,300 level again,” Patel said.
“If Bitcoin breaks below its current level, its next support will be $19,500. While the immediate resistance now lies at $20,475,” he added. On Friday, Bitcoin was trading at $19,810