- Ethereum price slides 6.5% in 24 hours following a rejection marginally below $1,800.
- The much-awaited Ethereum merge carries a myriad of risks despite being in development for many years.
- Confluence support formed by the 50-8hr SMA and the ascending trendline may pull ETH out of the downtrend.
Ethereum price plunged 6.5% in the last 24 hours as bears cemented their presence in the new month. The second-largest cryptocurrency moved higher last week, where it nearly brushed shoulders with $1,800. A glance across the crypto market reveals rampant overhead pressure, with Bitcoin price losing 2% of its value. More losses are likely as the week progresses, especially if bulls fail to reclaim recent highs.
ETH price under pressure as users and miners raise concerns over the merge
Ethereum price is likely to be heavily influenced by the Ethereum merge expected to take place in September. This software upgrade will see the leading smart contracts token transition to a proof-of-stake (PoS) from a proof-of-work (PoW) consensus. One notable development would be the abolishment of mining, as validators will secure the new network.
Most crypto enthusiasts welcomed the transition from its initial stages, but concerns regarding the future of the network have been rising. Miners, in particular, will be affected the most, with some already seeking alternative networks such as Ethereum Classic (ETC).
"There are a lot of potential risks with ETH merge. The fact that people have been working on it for years doesn't mean it will work out perfectly," Evgeny Gaevoy, CEO of Wintermute, said in a tweet.
Bears are gaining momentum
Ethereum price seeks support at the confluence formed by the 50-8hr Simple Moving Average (SMA) and an ascending trend line. The current pullback might continue in the coming sessions based on an analysis of a sell signal from the Moving Average Convergence Divergence indicator (MACD) on the 8-hr chart.
ETH/USD eight-hour chart
If Ethereum price breaks below the support confluence, it will erase most of the gains accrued last week. Below that, critical support areas lie at the buyer congestion zone at $1,500, the 200-8hr SMA, and the last line of defense at $1,250.
Conversely, if ETH price manages to stay and hold above the confluence support area, it will change the outlook to a bullish narrative. Since there is a good chance developers will address most of the risks associated with the merge as the date approaches, it is probable for the odds to flip in favor of a bullish move. A break above $1,800 and subsequently past $2,000 could trigger significant investor interest, with Ethereum price eyeing $3,000 thereafter.
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