After a surge in Ethereum (ETH) costs final week, the cryptocurrency might now be treading in a consolidation part, says asset administration agency IDEG’s chief funding officer.
In a report shared with Cointelegraph on Monday, the writer of the report, Markus Thielen mentioned he whereas he has been bullish on ETH costs six weeks in the past, he has now turned “cautious.”
The thesis has been based mostly on macro elements and worth evaluation of the cryptocurrency, noting that the Fed nonetheless continues to “ramp up its Quantitative Tightening (QT) program which drains liquidity,” whereas noting that ETH’s costs had reached technical resistance at round $1,800.
The asset administration agency additionally famous that this has come as Ethereum has seen a 47% drop in community income, a lower in complete quantity locked (TVL) and there was additionally a lower within the stablecoin market cap with USDC experiencing $1.1 billion of outflow during the last week.
Chatting with Cointelegraph on Tuesday, IDEG chief funding officer Markus Thielen famous that the latest worth rally has not been supported by a change in fundamentals.
Thielen additionally believes that hype across the “Ethereum Merge” is now experiencing a downward development, illustrated by latest Google search knowledge.
Thielen recommended that this “Merge fatigue” signifies that ETH is ready for a consolidation interval previous to the upcoming Merge on September 19. However Thielen additionally added that this will open up doorways for extra shopping for alternatives:
“Ideally, a drop into the tip of August would set us up for one more nice entry-level”.
Thielen additionally commented on the fascinating correlation between ETH worth and Ethereum Merge Google search outcomes that’s presently at play:
“It’s a good indicator for sentiment and curiosity, however it should ultimately break down and grow to be irrelevant. However, it’d supply some insights into timing present Ethereum’s worth turn into the occasion”.
Following the Merge, Thielen is of the view that ETH worth shall be principally influenced by how briskly adoption charges improve:
“Whereas fuel charges may keep the identical, the adoption curve may not rise initially as quick as many hope, this might make ETH barely valued, when measured in pure cashflow phrases”.
ETH is presently priced at $1,587 on the time of writing, down 6.24% during the last 24 hours.