The upcoming Ethereum Merger that will change the protocol PoS is the primary cause for the price increase of Ether. The crypto asset must reach the 50-week EMA at USD 2,340 before moving toward USD 2,500.
Ether (ETH), the Ethereum native token, recently outperformed Bitcoin (BTC) regarding returns. The price of the second largest cryptocurrency has also doubled since the crash to USD 885 in June.
According to technical and fundamental indicators, the price action of Ether is moving toward USD 2,500.
The Ethereum Merger
The Merger scheduled for September 16 is the primary cause for the price increase of Ether. After that event, the network will change its protocol from proof of work (PoW) to proof-of-take (PoS).
In addition, validators will replace miners when the network shifts to proof of stake. That caused fear among miners like Chandler Guo, a Chinese cryptocurrency miner against the measure.
That has led Chandler to name his version of the Ethereum PoW chain ETHPoW and its native token ETHW.
Binance plans to list ETHW on its trading platform, as other crypto exchanges have already done.
However, current Ether holders will reportedly receive an equal amount from the new Ethereum PoW chain.
That should increase the demand for Ether in the cryptocurrency market, driving the price action toward USD 2500.
The Ethereum 50-Week EMA
Following a significant drop in its price, Ether seems to be in a recovery rally. The Ethereum native token has adjusted its resistance level at USD 1,625 as a support level. The second-largest cryptocurrency is heading toward a subsequent resistance level at USD 1,975.
If the value of Ether hits USD 1,975, it will head toward USD 2,000 in the short term. The crypto asset must reach the 50-week exponential moving average (50-week EMA) at USD 2,340 before moving toward USD 2500.
Inflows from Institutional Investors
The inflows of capital into Ethereum-based investments will drive the price of Ether toward USD 2,500.
Institutional products attracted USD 16.3 million in investor funds in just one week. Meanwhile, Bitcoin experienced capital flows amounting to USD 8.5 million in the same period. That aspect proves that Ether has outperformed the pioneering cryptocurrency.
The hype about the syndicate is a leading bullish factor, as described above. However, after the PoS upgrade in September, traders might start selling the news, causing the price of Ether to drop significantly.
Ether is trading at around USD 1,865 and has accumulated a 15.5% gain over the last week. While its daily trading volume is above USD 17.63 billion, its market capitalization is about USD 223.58 billion, according to CoinGecko.
Cryptocurrencies play a crucial role in the economy, evident in the interest of investors in them. The increase in the price of Ether over the last week proves it has outperformed Bitcoin in terms of returns. However, it is a matter of time before seeing how the behavior of the market determines what will happen.
By Alexander Salazar
