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What’s Next for Ethereum?

Ether rallied on Thursday after the Ethereum network conducted a final, successful test before its transition to a proof-of-stake protocol. The second-largest cryptocurrency by market capitalization jumped 11% to $1,909.16.

The transition to a proof-of-stake network has been in the works since 2020. It will allow Ethereum to significantly reduce the amount of computing power and energy consumption required to carry out transactions on the blockchain.

Ethereum users have been testing the blockchain’s proof-of-stake protocol since December 2020, running the tests adjacent to the existing proof-of-work network.

It has not yet been decided when the merger will be completed, with Ethereum developers meeting on Thursday to discuss the matter. The merger was delayed several times to allow time for additional research and testing to ensure a successful implementation.

The long-awaited and widely speculated merger, dubbed “Ethereum 2.0,” aims to transition ethereum from the energy-intensive consensus mechanism to the more efficient model.

Proof of work requires miners to use large amounts of computing power and energy to authenticate transactions on the blockchain by solving puzzles. Proof-of-stake, however, is a system built around proof-of-stake where users “stake” their own ether holdings and thus reduce the amount of computing power required to complete transactions.

The “Merge” – is about to end Ethereum mining altogether, cutting off profits for about 1 million people. This will be a huge financial blow and almost a complete loss of a good source of income.

Proof-of-stake can reduce the energy consumption of the Ethereum network by about 99%. It would also put miners out of work, a significant blow given the capital investment that goes into setting up operations. Ethereum miners have spent an estimated $15 billion on graphics processing units (GPUs), and that doesn’t include ancillary costs like cabling and transformers.

ETH 1D CHART

Ether outperforms Bitcoin on transition news.

Sequential is nearing the end of its up cycle for the second time since the corrective movement began and the demarker oscillator is forming a bearish divergence. This signals potential movement exhaustion.

The main trend remains downward, but the positive thing is that the price action managed to break through the historical resistance at the level of 1742 and is currently holding above it. The next resistance is the diagonal resistance from the descending channel where the 38.2 fib level is also located. Traders are expecting a test of resistance in the coming weeks. A rejection will follow a test of the diagonal support of the minor ascending channel, and a break of the support, the price will head for a test of the lows 1363 / 1000 / 861


 Dealer Borislav Andonov

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