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Following some positivity in the last week of trading, Ethereum has entered the short-term local correction trend and will most likely be tested in the upcoming week as it reaches the important support level that stayed intact for the last 50 days. The drop below it will mark the continuation of the downtrend.
The trendline support we have mentioned is the line that originated at around $1,400 and the bounce that happened on Ethereum after it. Unfortunately, the price increase stopped at around the $1,600 level as the second-biggest cryptocurrency formed a spinning top reversal pattern and got denied at the 50-day moving average.
In the upcoming week, one of the most expected scenarios is a reversal to the aforementioned trendline and yet another test for Buterin's coin, which will undergo a massive update around Sept. 15.
Technically, the Merge is the only fundamental growth factor for Ethereum today as the two main industries that bring the most revenue and value to the network, DeFi and NFT, are in a stalemate.
Considering the past price performance of ETH, the second-biggest cryptocurrency has already priced the successful update to the new type of consensus mechanism. After the Merge is installed, we will most likely see a mild price or volatility increase.
The negative scenario would commence if the network faces certain technical issues and starts showing degraded performance. Luckily, every testnet installation ended up well with all of the network's functions remaining intact.
Ethereum miners are also getting ready for the massive update, moving their hash power to alternative networks or getting ready to mine the Ethereum PoW alternative that will be released after the mainnet closes the "outdated" consensus algorithm once and for all.