Ethereum has fallen below $1,700 since July 2021. At the time, the price of ETH was reacting to a decline due to increased selling pressure in the cryptocurrency market.
| TA: Ethereum has key support why ETH should overcome this hurdle
This time around, Ethereum appears to be reacting to poor macro conditions and a potential delay to its most important milestone in recent history: the merger. The event that will complete the transition of ETH to the Proof-of-Stake (PoS) blockchain.
At the time of writing, Ethereum (ETH) is trading at $1,680 with losses of 6% and 8% over the past 24 hours and 7 days, respectively. ETH is one of the worst in the top 10 by market cap, followed by Solana (SOL), Dogecoin (DOGE) and XRP.
The Ethereum network recently successfully deployed “Merger” on its oldest testnet, Ropsten. The community has noted this, with many claiming that a mainnet launch is possible by August or September of this year.
The implementation of the “Merger” on Ropsten encountered some difficulties, but the main developer of ETH Tim Beiko argued contacted them and “fixed everything”.
The difficulty bomb is part of the mechanism that will allow Ethereum to move towards PoS consensus. This mechanism will gradually increase the difficulty of mining and will prevent these entities from maintaining a second ETH based on Proof-of-Work (PoW).
As Beiko explained, the “complexity bomb” is already affecting the network:
The bomb is felt on the net, and like a real bomb, it turned out to be faster than predicted. The block time is ~14s, and EIP Arrow Glacier (the author is yours truly) predicted a “~0.1 second delay to block time by June 2022”. and ~0.5 second latency by July 2022.
The ETH core developers have agreed to delay this mechanism for at least 2 months. This will give them more time to work on their transition to PoS consensus.
What the difficulty bomb delay means for Ethereum
However, ETH core developers do not seem to agree on what the difficulty bomb delay means for Ethereum. Ben Edgington, lead product manager for Teku, an Eth2 client developed by ConsenSys, announced the following:
(…) we will push back the Ethereum difficulty bomb. We say that this will not delay the Merger. I sincerely hope not. Each additional week of PoW generates about 1 million tons of CO2 emissions.
Edgington believes developers should agree on the purpose of the main Merge network. This way, ETH clients and the community can “prepare.”
In this sense, Beiko replied that the event is still expected at some point between August and November of this year. He believes that only a “catastrophic event” could delay the Fusion this year.
On setting a specific date for the Merger, Beiko came to the following conclusion:
I’m guessing my opinion is that having an explicit target for now will basically not change the output speed of client commands, at least not by EL (execution level). We have a lot of implicit motives (devcon, bomb) as well as intrinsic motivation.
| Bitcoin Spot To Derivatives Stream Forms Historic Bullish Pattern
Despite progress in this major ETH event, the market is already sluggish and any potential signs of weakness could fuel increased selling pressure.
Credit : www.newsbtc.com