(Akash Girimath – FXStreet)
– Ethereum price shows signs of weakness in the short-term, but a Merge-induced recovery is plausible as the upgrade date approaches.
– A move to $1,730 and $2,000 seems likely if the buyers step in after a minor pullback to $1,505.
– A daily candlestick close below $1,420 will invalidate the potential recovery rally for ETH.
Ethereum price seems to be following Bitcoin price lower now that the Merge-induced bullish momentum has subsided. However, investors can still be optimistic about a potential recovery rally as the highly anticipated update, scheduled to take place between September 6 and September 15, approaches.
On the other hand, actor Bill Murray’s ETH stash, worth $185,000, was stolen by a hacker after raising 119.2 ETH. Not all was lost, however, as Murray’s security team mentioned that it foiled the hackers’ plans to steal the actor’s NFT collection by moving it to a safehouse wallet.
Ethereum price will provide an opportunity
Ethereum price created a range, extending from $2,030 to $1,420 when it crashed 30% between August 14 and August 28. Although Ethereum outperformed BTC, it continues to follow Bitcoin price, which is trending lower.
A short-term recovery rally then pushed ETH up to the 70.5% Fibonacci retracement level at $1,621 until bulls exhausted themselves. As a result, ETH is now heading lower, following the big crypto’s footsteps.
A break below the 50% Fibonacci retracement level at $1,563 will signal that sellers are in control. In such a case, a minor down move to $1,531 seems plausible. However, if selling pressure continues to grip the market, Ethereum price could visit $1,505 and fill the imbalance extending from $1,471 to $1,454.
Institutions or buyers are likely to trigger a quick recovery rally before Merge, hence, the ongoing downtrend could result in a push to $1,725, which is the mean of the 30% crash. This level also coincides closely with the higher time frame resistance level at $1,730. Therefore, a local top could form here.
Despite the resistance concluding at around $1,730 investors should keep a lookout for a sudden spike to the $2,000 psychological level due to Merge, which is a high-impact news event for Ether.
On the other hand, if Ethereum price breaks below and flips the range low at $1,420 into a resistance barrier, it will invalidate the potential recovery rally thesis prior to the Merge. This development could see ETH revisit $1,280 and, in some cases, $1,080.
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