Ethereum may now be entering a consolidation phase after last week's price surge, according to the chief investment officer of asset management firm IDEG.
In a report shared with Cointelegraph on Monday, the report’s author, Markus Thielen, said that while he had been bullish on ETH prices six weeks ago, he has now turned “cautious.”
Based on macro factors and price analysis of cryptocurrencies, the report noted that the Federal Reserve is continuing to "increase its quantitative tightening (QT) program, which will exhaust liquidity," while noting that the price of ETH has reached a technical resistance level around $1,800.
The asset manager also noted that this was due to a 47% drop in Ethereum’s network revenue, as well as declines in total value locked (TVL) and stablecoin market capitalization, with USDC experiencing $1.1 billion in outflows in the last week.
Markus Thielen, chief investment officer at IDEG, noted in an interview with Cointelegraph on Tuesday that the recent price increase has not been supported by fundamental changes.
Thielen also believes that recent Google search data shows that the hype surrounding "Ethereum merger" is experiencing a downward trend.
Source: "Ethereum Consolidation" Google Trends Results: Google, IDEG Research
According to Thielen, this "merger fatigue" suggests that ETH will enter a period of consolidation ahead of its Sept. 19 consolidation. But Thielen also added that this could open the door to more buying opportunities:
"Best-case scenario, prices drop to the end of August and we'll have another decent entry level."
Thielen also commented on the interesting correlation between the current ETH price and Ethereum merger Google search results:
“It’s a good indicator of sentiment and interest, but it will eventually break and become irrelevant. Nonetheless, it may provide some insight into when the current ETH price is changing.”
Thielen believes that after the merger, the price of ETH will be mainly affected by the speed of adoption growth:
“While gas fees may remain flat, the adoption curve may not initially rise as rapidly as many hope, which may leave ETH slightly undervalued on a pure cash flow basis.”
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