As the Ethereum Merge approaches, the market is undeniably buzzing with excitement. The same can be seen in ETH’s price movement, which has also managed to rise back above the $2,000 mark. Currently, it is simple to get sucked into the buzz and FOMO, but ETH traders should be cautious of potential pitfalls in the future.
Some skeptics note that the move away from proof-of-work (PoW) mining has been put off for years and that the Merge does not deal with the scalability problem. Sharding, often known as the network’s transition to parallel processing, is anticipated to take place in late 2023 or early 2024. The EIP-1559 burn mechanism, which was launched in August 2021, was crucial in making ETH scarce, according to the Ether bulls. Since there hasn’t been much of a correction during this run, it begs the issue of whether there will be one once the $2K mark is tested. Let’s look at the ETH price levels.
ETH Technical Analysis
Key Support Levels: $1,723 & $1,437 || Key Resistance Levels: $2,200 & $2,482
Buyers continue to rule the market and drive up prices. They were able to return to the $2,000 mark after 74 days. In the interim, a significant resistance level, or $2,200, will be preventing Ethereum’s price from rising further. The rally could reach $2,500 if we close above this region. On the other side, the weekly Relative Strength Index (RSI) has risen above 70, which can be a warning indication.
If Ethereum continues to perform as it did in April 2022 and November 2021, either by touching or before touching the resistance zone, it will likely stop performing. In this case, it is reasonable to expect that $1700-1800 will be retested. Although the short-term trend is generally bullish, if the price breaks below $1,723, the trend may be invalidated.
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