The merge is a vital update for Ethereum, which will switch from proof of work consensus to proof of stake consensus. It will be more eco-friendly for long-term sustenance. Developers are working on a soft deadline on the 19th of September, which will fall between Q3/Q4 in 2022. However, it may change depending on the success rate of the final testnet.
As a result, there will be no proof of work consensus in Ethereum. It will allow more upgrades in the future, making it a more scalable, secure, and sustainable cryptocurrency. Does it impact the price of Ethereum? Surely, it will influence the price, and we will discuss it later.
Misconceptions About the Merge Upgrade on Ethereum
Many people do not know about the features and benefits of Merge upgrade. As a result, rumors and misconceptions negatively impact the ETH price. Here are seven misconceptions about the Merge upgrade.
1) Node Running Need 32 ETH Staking
No ETH is needed to run a node on the Ethereum network. Even before the merge upgrade, anyone can freely sync their own self-verified copy of Ethereum on the network.
2) Lower Gas Fees After Merge Upgrade
The Merge only changes the consensus and allows scalability, and it does expand the network now, so there will be no chance of lower gas fees.
3) Faster Transactions After the Merge
Indeed, the network will be more efficient, secure, and scalable. Due to the change in consensus, the speed will increase to some extent, but there will not be any noticeable changes in the transaction speed.
4) Enabling Staked ETH Withdrawal After the Merge
You can stake ETH for the proof of stake consensus, but staking withdrawal is not allowed in this upgrade. The Shanghai upgrade will enable this feature.
5) Liquid ETH Is Not for Validators on This Network
Validators will get MEV on the Mainnet account immediately after the Merge upgrade. Shanghai upgrade will enable the staking withdrawal and some other features.
6) Staking APR Will Increase 300% After the Upgrade
The staking APR is expected to increase 50% after the upgrade but will not increase by 300%. This type of misconception indirectly affects the Ethereum price.
7) Possible Downtime of the Chain During the Switching
The algorithm is running on the testnet. Developers expect the smooth merge upgrade on the mainnet of Ethereum with zero downtime. That means the users will not suffer due to the changing consensus, and however, miners will suffer from it.
As a result, some community members want the existence of proof of work consensus, which means there is a possibility of forking, or they will switch to Ethereum Classic for mining ETC instead of ETH. There will be two parallel chains with two different consensuses. Miners holding an amount of Ether will get the same amount after the possible split.
ETH Holds Bullishness Ahead of Merge Upgrade
At the time of writing, Ethereum’s price is trading around $1851, which has been forming higher highs and higher lows in the upper range of the Bollinger Bands. $1800 is a strong resistance level, but it will decisively cross the level. Moreover, MACD and RSI also suggest bullishness for the short term.
Though the weekly chart is bullish, it is forming a weekly red candle this time around the baseline of the Bollinger Bands, which suggests bearishness. It is interesting to watch the next two candles on the weekly chart because if it forms two more red candles, then we can consider it a bear’s trap, and the ETH price will fall further. However, the chance is very less, especially during the Merge upgrade in September.
Logically, it is facing support around the baseline of the Bollinger Band, and it will cross the level decisively in the next few months. MACD is bullish, and RSI is over 40, which suggests long-term growth. However, for more precise projections, traders can explore our Ethereum prediction.
The price is going upward in the weekly chart before the Merge upgrade, and if the test net run is successful, then the price will move upward in the post-merger period.
Moreover, Ethereum is the second largest cryptocurrency with a wide range of use cases. It will become less energy-intensive, which is why investors are bullish on ETH for the long term.
