Ethereum has retraced by more than 18% over the past two weeks.
The losses extended after the Ethereum Foundation’s Tim Beiko hinted that “the Merge” could be months away.
Ethereum must hold above $3,000 to avoid a brutal correction.
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Ethereum followers suffered a setback this week after the Ethereum Foundation’s Tim Beiko hinted that the Proof-of-Stake transition wouldn’t occur in June 2022. The update came as Ethereum has been trying to find stable price support.
Ethereum Sits on Shaky Ground
Ethereum appears to be trading above the most critical support level on its trend.
The second-largest cryptocurrency by market cap has seen its price dive by nearly 18% over the past two weeks. The losses were extended this week after the Ethereum Foundation’s Tim Beiko hinted at a delay to the long-awaited “Merge” to Proof-of-Stake. “It won’t be June, but likely in the few months after,” he tweeted Tuesday. Notably, the Merge does not yet have a fixed date, but June 2022 has been discussed in the community as a rough target date for some time.
It won’t be June, but likely in the few months after. No firm date yet, but we’re definitely in the final chapter of PoW on Ethereum
— Tim Beiko | timbeiko.eth 🔥🧱 (@TimBeiko) April 12, 2022
The number two blockchain has developed a reputation for its slow development times; “the Merge” to Proof-of-Stake has been in planning for several years, with Vitalik Buterin initially suggesting that it would be ready way back in 2016. Any further delays could impact Ethereum’s trading price.
Ethereum has been testing the 50-day moving average as support for the past five days. Although this demand zone has managed to hold Ethereum so far, any spike in selling pressure around the current price levels could have brutal consequences for the bulls. Breaching the $3,000 support level could push ETH down to $2,400.
Despite the bearish outlook that a break of the $3,000 support poses, the asset has several strong fundamentals supporting the bullish thesis. More than 11.5 million Ethereum have been deposited in the Eth2.0 deposit contract, over 2.1 million Ethereum have been burned via EIP-1559, and the balance on exchanges is at a four-year low of 20.6 million Ethereum.
Such market behavior hints at a significant reduction of selling pressure and a potential supply shock. If Ethereum prints a daily candlestick close above its 200-day moving average at $3,500, it could advance further. In that scenario, the first bullish target would be at $4,120.
Disclosure: At the time of writing, the author of this piece owned ETH and BTC.
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