The cryptocurrency may now be in a consolidation phase after last week’s surge in the price of ethereum (ETH), said the chief investment officer of asset management firm IDEG.
In a report shared with Cointelegraph on Monday, the report’s author Markus Thielen said that while he had been bullish on ETH prices six weeks ago, he is now becoming “cautious.”
The paper is based on macro factors and a price analysis of cryptocurrencies, noting that the Federal Reserve continues to “intensify its quantitative tightening (QT) program, which drains liquidity,” while noting that ETH has reached technical resistance around $1,800.
The asset manager also noted that this was due to a 47% drop in Ethereum’s network revenue, a drop in total transaction volume locked (TVL), a drop in stablecoin market cap, and USDC outflows of $1.1 billion. the last week.
IDEG chief investment officer Markus Thielen pointed out in an interview with Cointelegraph on Tuesday that the recent price rally has not been supported by changes in fundamentals.
Thielen also believes that the hype surrounding the “Ethereum merger” is now experiencing a downward trend, as evidenced by recent Google search data.
resource: “Ethereum Merger” Google Trends results: Google, IDEG Research.
This “merger fatigue” suggests that ETH will enter a consolidation period ahead of the upcoming merger on September 19, Thielen said. But Thielen also added that this could open the door to more buying opportunities:
“Ideally, going down to the end of August would set us up for another great entry level”.
Related: Professional Traders May Use This ‘Risk-Off’ Ethereum Options Strategy for Consolidation
Thielen also commented on the interesting correlation between ETH price and Ethereum Merge Google search results, currently in play:
“It’s a good sentiment and interest indicator, but it will eventually collapse and become irrelevant. Still, it may provide some insight into the timing of current ethereum price changes in events”.
After the merger, Thielen believes that ETH prices will be primarily affected by the rate of adoption growth:
“While gas fees may remain the same, the adoption curve may not initially rise as quickly as many would like, which may leave ETH slightly valued when measured in pure cash flow.”
The current price of ETH is $1,587 At the time of writing, it is down 6.24% in the past 24 hours.