The Ethereum price could have moved into a consolidation phase after a sharp July rally as investors awaited the migration to the Proof-of-Stake consensus algorithm Proof-of-Stake. This was stated by Markus Tilin of the IDEG asset management firm, Cointelegraph reports.
According to the expert, the growth prospects of the second-largest cryptocurrency have grown less optimistic compared with six weeks ago.
As justification, the expert cited a contraction in liquidity ФРС as part of the so-called “quantitative tightening” and Ethereum’s price hitting resistance at $1800.
The IDEG representative also noted a 47% drop in miners’ revenue in July, a decline in TVL in DeFi protocols and a contraction in the market capitalization of USDC by $1.1 billion last week. The Ethereum price rebound is not underpinned by improved fundamentals, Tilin stressed.
The expert forecast that the current consolidation phase would persist until The Merge, whose activation is expected on September 19.
“In an ideal scenario, a drop by the end of August would have prepared us for another strong move back to the initial level,” — the specialist said.
According to Tilin, going forward, Ethereum’s price dynamics will depend on the pace of adoption of the second-largest cryptocurrency.
“While gas fees may remain the same, the adoption curve may initially grow not as fast as many expect. This will lead to a modest re-rating if measured in terms of net cash flow,” — he explained.
Earlier, Glassnode questioned the continuation of Ethereum’s recovery rally, pointing to inconclusive on-chain indicators.
Earlier, Coinbase opened the possibility of staking Ethereum for institutional clients.
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