- The Merge event saw energy consumption for the Ethereum token reduce significantly, by 99.99%, Software Company ConsenSys says.
- The transition to PoS mechanism paved the way for a more environmentally friendly era in the cryptosphere.
- Ethereum price is trapped within a formidable supplier congestion zone but bulls are looking to reclaim above $2,000.
Ethereum (ETH) price began the year with the right foot forward, soaring almost 40% to a high of $1,603 on January 16. A buildup of uncollected liquidity around that level provoked the bears, who dominated the market for the next two days.
Bulls took over on the 19th and raised the price by 15% to $1,654, recovering all the ground lost. Since then, the price has consolidated around this level with another series of uncollected liquidity that saw the price plummet between February 9 and 13. Looking at the chart, this was a good strategy as investors waited to buy ETH at discounted prices. Evidence of this is the two-day bull run beginning February 14 that saw the price retest the significant resistance at $1,704.
At the time of writing, Ethereum exchanged hands for $1,652 after gaining almost 2% on the last day. Its market cap was also up 2% to around $202.4 billion, with evidence of a 13.91% increase in 24-hour trading volume to $7.9 billion.
Ethereum Network Fees Falls 99.99% Since The Merge
The most significant technical update on the Ethereum network was The Merge, which transformed the consensus mechanism of work unit certification to equity certification. With this transition, energy consumption for the Ethereum token was reduced significantly.
Before the transition, the Ethereum network’s annual energy consumption was $23 million. The energy consumption of Ethereum reached its peak in 2022, ranging between 46.31 TWh to 93.97 TWh per year, leaving a carbon footprint of 100,000 tons of carbon dioxide (MtCO2) per year. The minimum energy consumption recorded was 4.75 TWh per year on December 25, 2019.
The Merge, which terminated the proof-of-work (PoW) mining model, paved the way for a more environmentally friendly era in the cryptosphere. Software Company ConsenSys, which focuses on Ethereum, authorized the analysis from the Crypto Carbon Ratings Institute (CCRI). The company asserts that Ethereum currently uses 99.99% less energy. That is not all; the carbon footprint of the blockchain has also dropped by 99.99%.
Based on the CCRI report, the estimated energy consumption is now approximately 2,600 mWh per year, with the annual CO2 emissions dropping from 11 million to only 870. The transition was among the most anticipated events in the crypto scene, mainly because of the energy numbers. As Ethereum transitioned to proof-of-stake (PoS), many people expect other significant Bitcoin coins to follow suit.
Although the transition reduced the energy numbers, crypto mining remains an energy-centric process. With a cohort of miners switching to green mining alternatives, the overall numbers are expected to drop in the coming years, making crypto mining a more accepted industry.
Ethereum Bulls Looking To Reclaim $2,000
At press time, ETH was trading at $1,652 and confronting significant resistance at $1,704. This roadblock has limited investor profits since September, capping the price underneath it. If buying pressure increases enough to breach and sustain above this level, it could increase the chances for the Ethereum price to soar.
Past the $1,704 level, bulls would be looking to restore the price above $2,000. They would have to flip two resistances into support, one at around $1,800 and the next at about $1,900. Overcoming these supplier congestion zones could send ETH prices up 19.20% to the $2,034 target. This would mean a 22.75% increase from the current price.
ETH/USD Daily Chart
The price was on strong support downward provided by the 50-day Simple Moving Average at $1,599. This floater elevated the ETH price, keeping it from sinking below the consolidation zone. Along with the 50-day SMA, the 200-day and 100-day SMAs at $1,417 and $1,433 also held the Ethereum price above water, providing turnaround points for bulls to revitalize.
The relative strength index (RSI) was also tipping upwards and about to send a signal to ‘buy ETH .’ This would be confirmed once it crossed above the Stochastic RSI (yellow). The price strength at 54 was also a good sign, adding credence to the bullish outlook.
Notice the Moving Average Convergence Divergence (MACD) indicator) the indicator was also moving in the positive territory above the mean line. This and the fading histograms bolstered the possibility of a continued uptrend.
On the downside, investors could succumb to profit-taking appetite, interrupting the uptrend. In such a case, the ETH price could steadily lose essential support due to the 50-day SMA and fall below the significant support at $1,600. If push comes to shove, the price could descend further, losing all the ground covered in January to the $1,213 level. This would signify a 19.29% drop from the significant support and 26.65% from current levels.
The bearish possibility draws support from the reddish histograms and the position of the MACD, just an arm stretch away from the negative zone.
