Ethereum ends the bearish week; however, there are several elements to take into account to distinguish the next bullish cycle.
After The Merge, the price of ETH experienced large falls, contrary to the many voices that expected a significant rise. In recent days, the Ethereum token struggles not to lose the support of $1,300. In fact, at the time of this news, its price is around $1,295.
Actually, given the current scenario in the short term, there is no glimpse of a rise that will direct the price of Ether towards a recovery trend. However, in the mid to long term, we might see the beginning of an upward trend.
It is worth noting that the price of ETH hit weekly lows at $1,220, after the merger occurred. However, the bulls subsequently managed to reclaim the $1,300 level, which has been very well defended so far.
At this time the price is moving in a sideways trend and below the 20, 50, and 100 EMAs.
To predict any such moves, investors should take into account the upcoming US inflation figures as the Fed’s measures involving high-interest rates have had a strong impact on the price of cryptocurrencies.
Why has the price of ETH fallen and when will it rise again?
Different analysts believe that it is most likely that people who liquidate today do so induced by external economic issues, such as high inflation rates and rising interest rates. On the other hand, the claim that Ethereum will be listed as a security and not as a commodity brings with it heavy sell-offs due to concerns of strict regulations for such measures.
Finally, it is worth noting the concerns raised by the fact that this network could be censored, due to the centralization of large companies operating in the US. Some experts mention the fear that this network could be controlled, even from its protocols.
Therefore, in order to start a new bullish phase, you have to overcome these rumors and with it, that inflation does not continue advancing. It is urgent that the Fed’s measures have a positive effect on the US economy, to avoid new draconian interest rates.
Will Shanghai be the start of a bull cycle?
The Merge update attracted an interesting bullish phase that propelled the entire cryptocurrency market into recovery, after yearly lows. So the next update, which brings significant technological advances to Ethereum, could reignite the hype again. This update is called “Shanghai” and the changes that will be included in it are discussed.
The “cherry on the cake” for such a bullish and hypothetical context would be that, at that time, there was already regulatory clarity, and fears of government interference had dissipated by then. Of course, by that time it is crucial that inflation is under control.
For the next year, it must be taken into account that the new Shanghai update could free the release of 21 million ETH, that is, the possibility of withdrawing the tokens placed in staking.
Investors in the short, mid, and long term should also bear in mind that if the Fed fails to curb inflation in the US, the price of ETH is vulnerable to falling to new yearly lows in the coming months.
By Audy Castaneda
