Former hedge fund manager and billionaire investor Mike Novogratz, founder and CEO of Galaxy Digital, has outlined a key price level to watch on Ethereum ($ETH) as the cryptocurrency surges ahead of its long-awaited Merge upgrade.
During an interview with Bloomberg, Novogratz noted that Ethereum needs to break through a key resistance level it’s facing around the $2,200 mark to keep going higher, at a time in which the cryptocurrency is rapidly rising towards the $2,000 mark.
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The price of Ethereum has risen over 66% over the last 30 days to now trade at $1,900, up from $1,140, as it moves toward its Merge upgrade, which describes the network’s current mainnet merging with the Beacon Chain’s PoS system, setting the stage for future scaling upgrades, including sharding. The move is expected to reduce Ethereum’s energy consumption by 99.95%.
Recently, Ethereum’s third and final test environment network merge before the Ethereum blockchain moves from its Proof-of-Work consensus into Proof-of-Stake, was successfully completed. The Goerli testnet merge was the last of three public testnets to run through tests ahead of the mainnet Merge, which is expected to occur at the end of September.
The two previous testnet merges, Ropsten and Sepolia, were largely successful as well. The move away from PoW is said to make the network cheaper, faster, and more environmentally friendly, however, it will also mark the end of an income stream for Ethereum miners who were being rewarded for securing the network.
In theory, to keep their activities intact and avoid the obsolescence of millions of dollars worth of mining hardware, miners are looking to back an Ethereum fork called EthereumPOW.
While Novogratz believes that if ETH breaks through its key resistance it will keep on rallying, he does not see it surge on the scale of last year’s bull rally, which saw the cryptocurrency surge to a new all-time high of well over $4,000. During the interview, he said:
Ethereum’s got a little bit more juice to the top of its range. If it takes out $2,200 it could go higher. That’s got a real story. But I don’t see you know the mania that we saw in 2021 or 2017 reigniting.
Per Novogratz, the upcoming Merge could reenergize cryptocurrency markets as when he first bought Ethereum in 2015 the move toward a Proof-of-Stake consensus was already discussed for the cryptocurrency. He added the move is “going to reduce the supply of Ethereum that’s sold every day dramatically.”
On top of that, the Merge is expected to significantly reduce Ethereum’s inflation rate, to the point the cryptocurrency could at times become deflationary.
Featured Image via Unsplash
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