ETH Soars to Multi-Week High as Merge Event Draws Closer

Crypto Breaking News

Aug 15

Written By: Ruzaini Rashid

Edited By: Igneus Terrenus and Charmyn Ho

Last week, the crypto market extended its recovery and rose in tandem with the broader financial markets in response to positive inflation news from the U.S. Last week's price action saw BTC cross the $25,000 mark for the first time since June, while ETH surpassed $2,000 as its Merge event drew closer.

According to data from CoinGecko, BTC gained 4.85% week-over-week, with its market capitalization climbing towards the $490 billion mark. Despite the modest gain, BTC's performance has been lackluster in recent weeks, as traders and investors focused their attention on ETH and its upcoming Merge.

As of Monday morning (UTC), BTC has ascended a leg higher, with Bybit's BTC Perpetual Contracts market changing hands at $24,778, up by over 1.5% from the previous day.

In spite of the recent slowdown, BTC appears on track for a trend recovery, one that could possibly see it retest the 200-day exponential moving average, which is currently projected at $31,142 at the time of writing.

BTC has held its ground firmly above the 20-day moving average (MA) support, which currently stands at $23,523. Additionally, BTC's 20-day MA has also crossed above the 50-day MA for the first time since April 2022, which indicates a shift in its mid-term price trend. The gradually upsloping 20-day MA and the relative strength index (RSI) in the positive territory indicate that the path of least resistance is to the upside. As such, if the bulls can sustain their momentum above $25,000, a retest of May's consolidation range from $26,000 to $28,000 is imminent.

On the flip side, should the price turn down from the current level and break below the 20-day MA, it suggests that bears remain active at higher levels. In the event that the 20-day and 50-day MA fail, the bullish thesis will be invalidated.

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Ethereum's transition into a proof-of-stake (PoS) consensus mechanism continues to be the focal point of discussions within the crypto industry.

The Merge is arguably the most anticipated crypto event of the year, with the latest reports suggesting that it could happen sooner than expected. Unsurprisingly, the hype surrounding the event has had a massive impact on ETH's price.

In the past week, ETH added over 17% of market value and currently stands at $1,978 after surging to $2,020 on Sunday.

With the recent price surge, ETH has also seen a sharp increase in derivatives activity. According to The Block's data dashboard, ETH Futures open interest has climbed towards the $10 billion mark, its highest since April 2022.

Meanwhile, ETH funding rates have also risen steadily over the past week across all major exchanges, suggesting that traders are continuing to pile into leveraged long positions.

With last week's rally, ETH is currently facing an overhead resistance at the 200-day moving average at $2,128. The daily relative strength index (RSI) reading has also entered the overbought territory, which may tempt short-term traders to book profits.

As such, traders should expect some price volatility in the coming days following a week of tremendous growth. A healthy pullback towards its 20-day moving average of $1,760 as of the time of writing, could present a good opportunity for investors to establish long-term positions.

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