The cryptocurrency world is anticipating the imminent transfer of the Ethereum blockchain. This event, known as The Merge, shifts the network’s operation from power-intensive proof-of-work to proof-of-stake.
Already in August, an important upgrade, the EIP1559, was completed to greatly ease the upcoming changeover. Simultaneously, the mining reward scheme and transaction pricing model have been modified.
The revised settings led more mined ethers to burn, resulting in a deflationary impact. This signifies that there have been more shows than there have been new shows.
However, the current drop in interest in the cryptocurrency market has resulted in transaction costs hitting their lowest level since May 2020. As a result, the quantity of coins burnt has decreased.
According to Glassnode statistics, this figure has dropped to its lowest level since EIP1559, at 11%. As a result, the quantity of accessible ETH is growing, impacting on the price in addition to the general negative market attitude.
Technical Ethereum Benchmarks
Ether managed to break over the resistance of the 61.8 percent Fibo retracement of $1582 last Thursday. On Friday, the 78.6 percent Fibo retracement of $1772 was tested.
However, the resistance became so powerful that the price has been steadily drawing down towards the 61.8 percent Fibo retracement. Should the support collapse at the daily close, the negative move should be extended into the 50% Fibo retracement of $1449.
If, on the other side, the 78.6 percent Fibo retracement is successfully broken, the emphasis will shift to the psychological $2000 level and the beginning point of the $2015 downward swing.