The Ethereum “merger” has become a hot topic among top crypto analysts after the incident that led to the collapse of the Ethereum network during Yuga Labs’ sale of Otherside, with almost $200 million lost in gas costs.
Related reading: Proof of Work vs. Proof of Stake – Laneaxis
The Ethereum merger, also known as Ethereum 2.0, is upgrading the existing Ethereum layer 1 runtime from proof-of-work (PoW) to proof-of-state (PoS)Beacon string.
POW was first used by early Bitcoin and Ethereum blockchain pioneers. It aims to achieve decentralization and security by using miners to decode cryptographic algorithms or puzzle-like mathematics.
As the demand for transactions grows, it becomes slow, gas fees increase, and resources intensify.
Proof of Stake (POS) is similar to POW, except that users authenticate transactions on the blockchain using the stake and are rewarded.
“The Merge” is a milestone for Ethereum and the community; it is important to note that the Beacon chain is shipped separately from the Ethereum mainnet. This means that Beacon runs in parallel as a POS, and all accounts, transactions, balances and smart contracts remain secured by POW until the final merger with POS.
Ethereum Price Remains High Despite Daily Resistance
Ethereum continues to show great bullish momentum as the predicted meltdown nears. Ethereum is currently trading at resistance at $1,730 at the time of writing on the 1D daily chart.
A breakout of this region would send Ethereum price to $2,400 and even higher if bulls and market sentiments remain strong ahead of the merger.
Ethereum is looking really good on the chart on a daily timeframe, which is a good sign as we head into a new month. Due to low volume on a weekend, Ethereum would struggle to break through resistance.
If Ethereum is unable to break out successfully, we may retest the $1,600 region as the closest support ahead of a major upside move.
Ethereum price on the 4H chart
Ethereum is currently facing resistance at $1,730 with low volume accompanying it. If there is to be a pullback over the weekend, the support at $1,600 would be a good entry.
Related reading: Will Ethereum Merge Skyrocket ETH?
The Relative Strength Index (RSI) is above the 50 mark indicating that the market looks healthy but with less price action. With bulls pushing Ethereum in the coming days, breaking the resistance at $1,730 would not be much of a challenge.