The Ethereum (ETH) price has ramped up significantly and increased by more than 5% since the early trading hours as the Ethereum Merge inches closer. However, it wasn’t able to keep up the momentum for long, as the price was dragged by bearish pressure from the daily highs near $1637 to its starting point. Though still far below the necessary levels, the buying volume is gradually increasing.
As a result, Ethereum may continue to trade between $1530 and $1613 while trying to return to its previous highs. If successful, the asset’s road to $1650 is anticipated to be an easy one.
According to predictions, judging from the current price movement, by the end of September, Ethereum’s price will be $2,102, a 29.16% rise over the current value of the currency.
The important question is: Are there any strong factors motivating the price rise, or is it just a bubble due to the merger? Read on.
Here’s Why ETH Could Rise In the Coming Months
As previously predicted by market analysts, there is no assurance that the Merge upgrade would lead to a rise in the price of Ethereum (ETH), according to Antoni Trenchev, co-founder of the cryptocurrency lending platform Nexo.
A loop of Feedback
In an interview with CNBC, Trenchev admitted that a price increase for Ethereum is a possibility, but that it will rely on the early success of the upgrade based on a “positive feedback loop.”
Interestingly, Ethereum’s value increased after the upgrade was announced, and some participants remain bullish on the stance that this is a positive sign for both the asset and the global market.
“We’ll have to wait and see, but it really depends on how quickly the new network attracts users and transactions because if that happens, a positive feedback loop might drive the price to rise significantly,” said Trenchev.
Additionally, the founder of Nexo noted that, in addition to the upgrade’s first success, Ethereum’s value might increase due to the Merge’s deflationary position. In the current climate of excessive inflation, he observes, such a characteristic is essential.
Therefore, whether it happens soon or later, it will likely be a winning proposition for Ethereum, since it will benefit from a substantially smaller supply after the upgrade.
Hence, this adjustment makes Ethereum less prone to inflation, making it a perfect asset for market participants to invest in.
The next prerequisite, in Trenchev’s opinion, is Ethereum must switch to a new consensus method that will encourage the development and enhancement of the network ecosystem.
There are some amazing things that are now being built on top of networks like Ethereum. Decentralized finance has a lot of potential amidst its nascency. The switch to proof of stake will make doing so simpler and more effective.
Lower Interest Rates
Some of the longer-term techniques that have been in use have enabled significant yield creation, which has been particularly exciting in the past ten to fifteen years’ low-interest environment. The metaverse is developing a bit more slowly than cryptocurrency enthusiasts would have liked.
The bottom line
As a result, it is projected that Ethereum’s price would rise in the coming quarter to balance the unfavorable effect that has been felt strongly lately. Since a bullish year can provide strong bullish momentum and a bearish year might result in new lows being tested, the end of the current year might be seen as crucial.