The native asset of Ethereum, Ether (ETH), has doubled in value since bottoming out in June 2022 around $885. A decisive move to $2,500 is now expected in August on a number of technical and fundamental indicators.
Ethereum Chain Split Means More Tokens
A large part of the current Ether rally has come about due to “the Meltdown,” a network upgrade that will change Ethereum’s underlying blockchain protocol from proof-of-work (PoW) to proof-of-stake (PoS) in September.
At the same time, the move to PoS will also eliminate the role of on-chain miners, replacing them with validators. This fear has led Chandler Guo, a Chinese cryptocurrency miner, to resist the merger by keeping the PoW version of Ethereum alive.
As a result, chain splitting is possible. Guo has already marked his version of the Ethereum PoW chain as “ETHPoW”, along with his native token “ETHW”.. Furthermore, some cryptocurrency exchanges have already listed the token for trading, and even Binance is considering doing the same, if necessary.
The Ethereum Merge is approaching.
Here’s what you need to know if you hold $ETH on #Binance:
Binance will support “The Merge”.
In case of newly forked tokens, we will evaluate and consider support for distribution and withdrawal.View details ⤵️https://t.co/iuQSsXZ7fk
—Binance (@binance) August 10, 2022
The Ethereum merger is drawing near. Here’s what you need to know if you hold ETH on Binance: Binance will support “The Merge”. For newly forked tokens, we will evaluate and consider support for distribution and withdrawal. See details ⤵️
A key aspect of a possible chain split is that current Ether holders will receive an equal number of tokens from the new chains.
At the same time, that could boost demand for ETH in the market, driving its price towards the $2,500 mark in the run-up to the merger.
The price hike is on
During its recent price rally, Ether has confidently rallied towards a critical support-turned-resistance range of $1,625 to $1,975.
The ETH/USD pair is now looking to retake the range as support, thus giving itself a strong price bottom to look for a rally to and above $2,000. Its closest upside target is the 50-week exponential moving average (50-week EMA – the red wave on the chart below) of $2,340.
The next range breakout target could be at Ether’s multi-month downtrend line resistance (the black line) around $2,500.
Institutional inflows gain momentum
The upside technical objective of $2,500 is signaled by a recent spike in capital inflows into Ethereum-based mutual funds.
In particular, these institutional products attracted $16.3 million from investors in the week ending August 5. Similar bottoms for bitcoin saw $8.5 million worth of capital outflows in the same period, suggesting a strong bullish bias for Ether against the major cryptocurrency.
Usually, the talk around the Merger acts as the main bullish catalyst, as mentioned above. However, Ether could see a strong price correction after the upgrade to PoS occurs in September.when traders potentially start to “sell on the news”.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, so you should do your own research when making a decision.
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