Thursday, November 30, 2023
HomeImmutableXEther underperforms despite the Merge’s execution

Ether underperforms despite the Merge’s execution

With the Ethereum Merge complete, the Ethereum network has finally transitioned to a Proof of Stake mechanism.

ETH, the native token of the Ethereum blockchain, has been underperforming over the past 24 hours. The poor performance is consistent with the performance of the broader cryptocurrency market.

The crypto market has lost less than 1% of its value in the last 24 hours, with a total market cap still below $1 trillion. Bitcoin is down more than 1% so far today and risks falling below the $20,000 threshold if the bearish momentum continues.

However, given that the Ethereum merge was successfully completed a few hours ago, ETH should rise. The event successfully completed a few hours ago after the network reached “Final Total Difficulty” early on Thursday.

The Merge changed the way ETH tokens are created and transactions are verified on the Ethereum blockchain.

In the past, Ether tokens were generated by mining. This is an energy-consuming process in which miners direct vast amounts of computational power to solve difficult puzzles.

Through a proof-of-stake mechanism, new ETH is generated by individuals or entities contributing large amounts of existing ETH tokens.

Important Levels to Watch

The ETH/USD 4-hour chart is bearish as Ether has underperformed over the past 24 hours. The technical indicators are bearish despite the merge taking place hours ago.

ETHUSD Chart by TradingView

The MACD line is inside the negative zone, indicating that the ETH market is bearish at the moment.

A 14-day Relative Strength Index of 36 indicates that ETH could enter oversold territory if the momentum holds.

At the time of writing, ETH is trading at $1,584 per coin. If the bearish trend continues, ETH may break below the $1,513 support level by the end of the day.

However, with Merge taking center stage in the crypto space, ETH may rebound and rise later. In that case, ETH is likely to break out of the $1,743 resistance level in the next few hours.

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