Why Ethereum Price Longs Might Profit Ahead Of “The Merge”

Ethereum price is close to reclaiming the area lost during yesterday’s downside action while Bitcoin slowly crawls back into $19,000. The second cryptocurrency by market cap is about to experience a major event with high potential to operate as a bullish catalyst, “The Merge”.

Ethereum trades at $1570 as of the writing. This is a 33% profit for the week. Market participants view ETH as the future savior for the sector, after Bitcoin fell by a new leg.

Ethereum price ETH ETHUSDT
ETH’s price moving sideways on the 4-hour chart. Source: ETHUSDT tradingview

Are Bears or Bulls Taking Control of the Ethereum Price?

Due to its importance, many experts are speculating about the potential for “The Merge”, the transition from Proof-of-Work (PoW) to Proof-of-Stake (PoS), to support a relief rally in the market. Others believe the event will operate as a “Buy the rumor, sell the news event”.

When there’s a well-known event, it is common for the market to crash after that hype has dissipated. The U.S. Federal Reserve (CPI) will release its next week’s print. This is a measure used to gauge inflation.

Economist Alex Krüger claims the CPI print might provide support for risk-on assets to rally. In the past, cryptocurrency have trended upwards after such events. Together with “The Merge”, Ethereum price seems poised for upside volatility. The expert saidThe potential setup for ETH traders

Trade $ETH for the Merger in direction. You will want to place stops above the August lows, and aim for a break of 1700 to move the price to the 1800-2100 area.

Whether ETH’s price can sustain the bullish momentum post “Merge”, Krüger believes that this will depend on the strength of the price action. The price could flip support levels and key resistance points if Ethereum is able to heat up into the event.

Can “The Merge” Trigger A New Crypto Bull Run?

Despite its importance, Krüger believes “The Merge” might be unable to push the crypto market into price discovery. Along with cryptocurrencies, legacy financial markets are also trending downward. Just a few days prior to the event, this is the biggest overhead resistance. Krüger added:

Fundamentally the merge improves ETH attractiveness via lower energy consumption and more importantly vastly improved tokenomics (…). This is not likely to be sufficient to launch a bull market. For that, you will need an equity bull market. For me, the $ETH decoupling idea is a pipedream.

The CPI print will support crypto if the equities rise. Fed Chair Jerome Powell suggested that macro conditions may remain unfavorable throughout 2022.

Tony Spilotro presents an alternative thesis in this video. He examines current market conditions, and why falling Bitcoin dominance may indicate that there is a new Altcoin Season. This could have positive implications for Ethereum price heading into “The Merge”. Have a look.

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