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Although ETH price gave a breakout of the wedge pattern, markets have turned cautious over the spotting of Nord Stream 1 by Russia and the possibility of exacerbating energy crisis in Europe.
The world’s second-largest cryptocurrency Ethereum (ETH) has witnessed strong selling pressure over the last few weeks. However, it has managed to hold firmly above the $1,500 level. As per the technical chart, ETH looks poised for a price rally ahead of the Ethereum Merge. But buyers have been hesitating to participate amid news of Europe soon facing a gas crisis. Russian energy giant Gazprom has announced an indefinite suspension of gas supply to Europe citing an oil leak. This has further alleviated the concerns of inflation and will force central banks to stick to liquidity withdrawal.
What ETH Technical Indicators Show
Last week, ETH gave a breakout on the falling wedge pattern through two converging and descending trendlines. Explaining the ETH price breakout, Bill Noble, chief technical analyst at cryptocurrency research company Token Metrics told CoinDesk:
“The formation is solid confirmation that ETH could go up in September more than anybody thinks”.
The wedge breakout indicates that the ETH correction from the high of $2,000 on August 14 has ended and the uptrend from the low of $1,000 on June 13 has resumed. The Ethereum price has been rallying over the optimism surrounding the Merge upgrade scheduled on September 15. This technological shift will transform Ethereum into a Proof-of-Stake (PoS) platform. The overhaul will cause a drastic reduction in ETH supply.
Lewis Harland, a researcher at Decentral Park Capital, said:
“Ether has broken out of a falling wedge. A move above $1,700 would add conviction in the bullish momentum heading into the Merge”.
All Eyes Are on Russia’s Gazprom
The key to a major energy crisis in Europe is currently in the hands of Russia’s largest gas supplier Gazprom. Over the last weekend, Gazprom scrapped the deadline to resume gas supply to Europe via the Nord Stream 1 pipeline citing an oil leak and technical fault.
This news has kept the markets on the edge sparking fears of further inflation in an already heated European economy. Ever since Russia’s invasion of Ukraine, energy supply disruptions have major affected Europe leading to sticky inflation.
As per reports, Russia has said that it would increase its shipments to Europe via Ukraine. However, the global markets remain skeptical of such a move. As result, it has also created pressure on the crypto market.