Ethereum price: This price can unlock ETH bullish potential post Merge

Ethereum layer one activity remained largely stagnant since the beginning of 2021. Analysts predict a massive rally in Ethereum price with scarcity emerging as a key driver of ETH. 

Also read: Ethereum price: Chandler Guo, Justin Sun battle Vitalik Buterin to keep ETH POW alive

What to expect post Merge: Low gas fees, high transaction speed?

Ethereum’s Merge is surrounded by hype and uncertainty. The transition from Ethereum’s proof-of-work to proof-of-stake consensus mechanism has been highly anticipated in the ETH community. However, the reality is that ETH holders may not notice changes in the altcoin post successful completion of the Merge. 

The Merge is scheduled for September 15, according to a recent blog post from the Ethereum Foundation. While the level of technical sophistication required for the Merge has taken years to develop, the significant consequences are long-term. The immediate result of the transition is the reduction in electricity consumption, by as much as 99.9%. 

Ethereum Power Consumption pre and post Merge

• Traders’ Ethereum holdings are more secure from an attack post Merge: The switch in consensus mechanism will help make Ethereum more secure, compared to if it remained a proof-of-work chain. On a proof-of-stake system, an orchestrated attack would carry an inherent penalty for failure. Therefore the financial incentive of an attack is reduced drastically. This levels the playing field for Ethereum community members and network participants. 
• Gas fees could see little change after Merge: The Ethereum Foundation has asserted that the change in consensus mechanism will have a little impact on transaction fees. Gas fees on the Ethereum network will remain relatively unchanged immediately after the Merge. 

• NFT fees could remain high: For NFT holders the Merge could be a non-event as NFT minting fees remain high. Therefore the Merge, or the change in Ethereum’s consensus mechanism does not have impact on NFT mint or NFT holders in the ecosystem. 

While the Merge is not expected to have a direct impact on the transaction cost in the Ethereum ecosystem, the event is expected to unlock ETH’s bullish potential with a massive rally. 

Hitting this price level could unlock Ethereum’s bullish potential

Ethereum price sustained its uptrend over the past week with $1,714 emerging as a key price level for the altcoin. As Ethereum price hovers near the 20/50/200-day EMAs, Yash Majithia, a crypto analyst argues that volatility is likely to increase. 

The analyst argues that a break beyond the $1,700 resistance could pave the way for a breakout past the $1,740 level. The bullish target for Ethereum is $1,800. 

Rationale. Phoenix Ashes, a crypto trader and analyst evaluated the Ethereum price trend and set a target of $2,020 for the altcoin. 

ETH-USD price chart

Why scarcity will drive Ethereum price post Merge?

Proponents are engaged in a debate to identify the largest driver of Ethereum’s price rally post the Merge. Is it the activity on Ethereum’s blockchain post the Merge or the scarcity of ETH, that’ll drive Ethereum price higher? Sisyphus, a crypto analyst and trader noted that daily active users on Ethereum layer-1 haven’t grown since early 2021. 

Daily active wallets across Ethereum L1 and non-Ethereum L1

Since the number of active traders on the Ethereum network is largely unchanged, the analyst argues that the driver of Ethereum price will be scarcity, not activity.