Ethereum price has been under intense pressure for the past few weeks as the coin struggles to find direction. The coin has crashed by 3% in the last week. Ethereum’s total market capitalization has also crashed. The total volume of Ethereum traded in the last 24 hours has edged 4.17% lower. The coin remains the second most valued digital asset in the world, after Bitcoin.
Ethereum’s Merge
Ethereum is based on blockchain technology. It enables people to build and use decentralized applications (Dapp) in its platform. Unlike Bitcoin, Ethereum is a contracts ledger technology platform that developers use to build new programs.
The Ethereum blockchain is one of the most used digital ledgers in the world. It is also the main platform for Web3, non-fungible tokens, and decentralized finance. Last month, the ETH blockchain accomplished the long-promised and oft-delayed “merge”, a technical switch in the way it works.
Before the “merge”, Ethereum used the “proof-of-work” mechanism. This involves the miners using enormous amounts of electricity to power computers to make repeated guesses of the number that will allow them to add a block of transactions to the blockchain.
With Ethereum’s shift to the “proof-of-stake” mechanism, the local population no longer has worries about rising energy costs. Ethereum now uses an algorithm that randomly selects someone to create a new block to add to the blockchain. The merge has reduced Ethereum’s energy consumption by nearly 99.95%.
While the merge is expected to boost the Ethereum price, macro-warnings led by the US Federal Reserve’s interest rate hikes to soaring inflation hint at a bearish trajectory.
Ethereum Price Forecast
The 4-hour chart shows that the Ethereum price has been range-bound for the past week. The coin is trading slightly below the 25-day and 50-day moving averages. Its Relative Strength Index is at 44.
The ETH price is struggling to bounce off the immediate support level at $1,280, hinting at a quick rally. If this happens, traders will be targeting the resistance at $1,343. Failure to maintain this bullish momentum will have the sellers targeting the support at $1,220.
