The week-long uptrend in the cryptocurrency market has started to rouse bullish crypto investors, and the successful launch of the Ethereum “merge” on March 15th on the Kiln testnet has the community excited for the upcoming Proof-of-Stake (POS ) made.
Data from Cointelegraph Markets Pro and TradingView shows that since its successful launch on Kiln, the price of Ether is up 25% from $2,500 to an intraday high of $3,193 on March 25 as traders look to hedge their pre-merger positions .
ETH/USDT 1-day chart. Source: TradingView
Here’s a look at what analysts are saying in the market, what could happen to Ether’s price as the merger nears, and how the move to POS could affect the price over the long term.
A clear breakout of the downtrend
The trend reversal in Ether price over the past few weeks has been succinctly addressed by crypto analyst and Justin Bennett, who Posted The chart below highlights the trend reversal that occurred.
ETH/USDT 1-day chart. Source: Twitter
bennett said
“Ether first higher high since early Nov 2021. Probably nothing.”
The merger will be a bullish development
A deeper analysis of the impact that the upcoming merger will have for Ethereum on its price was discussed by analysts at independent global macro and crypto research house MacroHive, who noted that the merger “will have bullish implications for Ether.”
According to MacroHive, “the prospect of being able to earn a passive return on staked Ether will attract more investors to the space,” while the move to proof-of-stake “will reduce Ethereum’s energy consumption by 99.95%.”
This, in turn, will help attract more institutional funds into the Ethereum ecosystem as environmental, social and governance (ESG) concerns “are mitigated around mining/proof-of-work energy consumption.”
The merger will also have a notable impact on the circulating supply of ether, as net issuance will see a significant drop upon completion as block rewards are replaced with ether staking returns.
MacroHive said,
“This coupled with the ongoing ether burn should make ether deflationary and this should be bullish overall.”
Related: Crypto rallies to a $2 trillion market cap as institutions signal their readiness to jump in
Merge could reflect bitcoin halvings
A final look at the implications of the upcoming merger was provided by options trader and pseudonymous Twitter user McKenna, who posted the following tweet comparing the merger’s impact to that of the Bitcoin halvings.
The merge is a crowded trade, but so is the BTC halving.
The only difference is that ETH becomes a deflationary asset with EIP1559.
The adoption of the S-curve as the foundational Web3 protocol will propel ETH to monumental heights over the next decade.
You’re not ready, Anon.
— McKenna (¤, ¤) (@Crypto_McKenna) March 23, 2022
The total cryptocurrency market cap is now $1.997 trillion and Ether’s dominance rate is 18.7%.
The views and opinions expressed herein are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should do your own research when making a decision.