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After years of planning, the Ethereum blockchain will finally transition to a PoS system!

How will Ether (ETH/USD) react to the actual event?

I’m checking out ETH/USD’s 4-hour ascending channel!

Ether (ETH/USD): 4-hour

Ether (ETH/USD) 4-Hour Chart

Ether (ETH/USD) 4-Hour Chart

Ethereum’s blockchain will transition from a Proof of Work (PoW) to a Proof of Stake (PoS) consensus algorithm in a few hours!

The upgrade, which promises to use much less energy to approve crypto transactions, is expected to attract institutional investors who didn’t like or were not allowed to invest in energy inefficient projects.

It would also further limit Ether’s supply.

See, ETH hodlers would have to stake and not withdraw their ETH tokens for a time period if they want to participate as network validators (transaction approvers).

This would mean less ETH available for those who want to buy the token.

The rewards for validators are also much smaller than those that went to proof-of-work miners, which means that less ETH will be minted after the upgrade.

Anticipation around the Merge has helped ETH/USD weather the dollar-buying and risk aversion themes in broader markets.

ETH/USD is making higher highs and higher lows inside a 4-hour ascending channel!

With hours before the Merge, ETH/USD is trading just under the $1,600 mark near the channel support.

It’s also sporting a continuation divergence with Stochastic, which could work in the crypto’s favor should the actual Merge lead to a surge in ETH-buying.

Watch your charts closely to see how ETH/USD reacts to its uptrend support.

A bounce from its current levels could lead to a trip back to $1,800 if not the $2,000 August highs.

On the other hand, a clear break below the channel could encourage a buy-the-rumor, sell-the-news situation and drag ETH/USD to its 2022 lows near $1,000.

This content is strictly for informational purposes only and does not constitute as investment advice. Trading any financial market involves risk. Please read our Risk Disclosure to make sure you understand the risks involved.