Ethereum’s price reaches $3.2K as expectation grows towards the ‘Merge.’
ETH price reversed course and is now aiming for the $3,800 milestone as traders’ anticipation of the impending Merge reintroduces bulls to the market.
The cryptocurrency market’s week-long rally has reawakened bullish crypto investors, and the successful March 15 launch of the Ethereum “merge” on the Kiln testnet has the community thrilled about the imminent proof-of-stake changeover (POS).
According to data from TradingView, the price of Ether has risen 25% from $2,500 to a daily high of $3,193 on March 25 as traders seek to lock in their holdings ahead of the merge.
Here’s what market analysts believe will happen to the price of Ether as the integration approaches and how the conversion to POS will affect its long-term price.
A clear break from the downtrend
The recent turnaround in the price of Ether was clearly addressed by crypto analyst; Justin Bennett, who shared the following chart demonstrating the trend reversal.
“Ether reached its highest level since early November 2021. Most likely nothing.”
Merger will be a positive development.
Analysts from the independent global macro and crypto research firm MacroHive analyzed the ramifications of the imminent Ethereum merger on the cryptocurrency’s price, noting that the merger “will have favorable implications for Ether.”
According to MacroHive, “the potential of earning a passive income on staked Ether will entice additional investors,” while the switch to proof-of-stake “would significantly cut Ethereum’s energy consumption by 99.95 percent.”
See also: What is Blockchain Scalability?
This, in turn, will assist in attracting further institutional capital to the Ethereum ecosystem by alleviating Environmental, Social, and Governance (ESG) concerns “about the energy consumption of mining/proof-of-work.”
The merger will also have a substantial effect on Ether’s circulating supply, as net issuance will decline significantly once the merger is complete, when block rewards are replaced by Ether staking yields.
According to MacroHive,
“When combined with the continuous Ether burning, this should result in deflationary conditions for Ether, which should be bullish overall.”
Mergers could be analogous to Bitcoin halvings.
A final piece of information regarding the imminent merge was provided by options trader and pseudonymous Twitter user McKenna, who compared the merger’s implications to those of Bitcoin halvings.
The whole cryptocurrency market capitalization currently stands at $1.997 trillion, with Ether commanding an 18.7 percent market share.
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