After an Ether push (EE) price last week, the cryptocurrency can now enter a consolidation phase, says the chief investment officer of asset management firm IDEG.
In a report shared with Cointelegraph on Monday, report author Markus Thielen said that while he was bullish on ETH prices six weeks ago, he has now become “cautious.”
The thesis was based on macroeconomic factors and cryptocurrency price analysis, noting that the Fed still continues to “accelerate its liquidity-draining quantitative tightening (QT) program,” while noting that prices in ETH had reached technical resistance at around $1,800.
The asset management firm also noted that this happened as Ethereum saw a 47% drop in network revenue, a decrease in total locked volume (TVL) and there was also a decrease in the market capitalization of stablecoins, with USDC seeing $1.1 billion in outflows over the past week.
Speaking to Cointelegraph on Tuesday, IDEG Chief Investment Officer Markus Thielen noted that the recent price rally has not been supported by a change in fundamentals.
Thielen also believes that the hype surrounding the Ethereum merger is now trending downward, as shown by recent Google search data.
Source: Google “Ethereum Merge” Trend Results: Google, IDEG Research.
Thielen suggested that this “merger fatigue” indicates that ETH is set for a period of consolidation ahead of the upcoming merger on September 19. But, Thielen also added that it could open doors for more buying opportunities:
“Ideally, a drop at the end of August would set us up for another great entry.”
Related: Professional Traders Can Use This “Risk Averse” Ethereum Options Strategy To Play Merge
Thielen also commented on the interesting correlation between the price of ETH and the Google Ethereum Merge search results that are currently in play:
“It’s a good indicator of sentiment and interest, but it will eventually break down and become irrelevant. Still, it could offer some insight into the timing of Ethereum’s current price change in the event.
After the merger, Thielen believes that the price of ETH will be primarily influenced by how quickly adoption rates increase:
“While gas fees may remain the same, the adoption curve may not initially rise as fast as many hope, this could make ETH marginally valued, when measured in terms of cash flow. pure”.
ETH is currently priced at $1,587 at the time of writing, down 6.24% in the last 24 hours.