Major cryptocurrencies continue to drop for the second day straight on with the Fed policy meeting failed to bring clarity on the US central bank’s rate hike stance.
Bitcoin price was trading nearly at $23,428 while Ethereum price is trading slightly above $1800. Likewise, major altcoins are trading near support zones.
Ethereum is currently stuck near $1,850 with bearish sentiments. On the upside, the ETH price is facing resistance near the $1,880 level. On a successful breakout, the ETH price will further head towards the $1,920 level, if the bulls remain intact the second largest crypto can surge above $2,000.
On the contrary, if the bulls fail to hold above the $1820 support level, ETH Price can drop below $1800 and possibly drop to the $1750 level.
How Will Ethereum Respond To the Merge Event?
According to Bitmex CEO Arthur Hayes, Ethereum Price might enter a correction phase in the coming weeks. As per his recent blog post, the ETH price might see a major decline if The Merge is unsuccessful.
Arthur explains two potential cases for Ethereum price.
Firstly, if the merger is successful there is a positive reflexive relationship between the price and the amount of currency deflation. Therefore, traders will buy ETH today, knowing that the higher the price goes, the more the network will be used and the more deflationary it will become, driving the price higher, causing the network to be used more, and so on and so forth. This is a virtuous circle for bulls. The ceiling is when all of humanity has an Ethereum wallet address.
Conversely, if the merger is unsuccessful, there will be a negatively reflexive relationship between the price and the amount of currency deflation. Or, to put it another way, there will be a positively reflexive relationship between the price and the amount of currency inflation. Therefore, in this scenario, I believe traders will either go short or choose not to own ETH.
Overall, Arthur believes that ETH won’t go lower than the $800 to $1,000 prices it experienced during the TerraUSD / Three Arrows crypto credit meltdown.