Ethereum, Ether (ETH) continues to decline amid rising interest rates, but market analyst Wolf believes Ether’s price could reach $4,000 by the end of 2022.
The reason for this is the release of Merge in August, which will mean the transition to a new model. The current Proof-of-Work (PoW) model, where network transactions use miner resources, will be replaced by the Proof-of-Stake (PoS) model, which will reduce network energy consumption by 99.95%, as expected. For Ethereum, this means stopping mining on video cards.
Independent market analyst Wolf suggested ETH is moving within a months-long ascending triangle model. The triangle model includes horizontal trend line resistance and upward trend line support.
The chart below shows that retesting the lower trend line ETN may contribute to a jump to the upper trend line at $4000.
Three-day ETH/USD price chart with upward triangle settings. Source: Wolf/TradeView
Wolff applied bullish signals from a similar 2016 triangle setup that formed before the $1 to $27 spike. The same situation was seen in 2017, when ETH/USD rose 270% to around $1,500.
After confirming one of the developers of Ethereum, Preston Van Loon, that the update of Blockchain – the project to Proof-of-Stake will take place in August, market analyst Wolf published his fractal analysis. He also noted that Ethereum set a “bear trap,” which would make sense before the update, complementing its technical configuration.
The main incentive for the rise in Ether prices in 2021 was a future update, as it was expected to eliminate scalability in the blockchain and reduce transaction and gas costs.
However, the launch of the update was postponed, the founders of Ether noted: “The cryptocurrency market is moving unusually fast, meaning crypto companies need a LOT of cash to drive rapid growth. Without cash, this could cause the economics of Ethereum tokens to ERC20 spiral into death.
Cryptocurrency analysts have found a confident similarity between the recent downturn and the recession caused by the pandemic panic in March 2020.
However, whether events will develop further according to the 2020 scenario, when there was a long increase in cryptocurrencies, or there will be a further decline, this question remains open.
Latest News