Ether’s (ETH) price jump from mid-July until mid-August may continue to fade as investors seek to better understand the implications of the Merge, Ethereum's tech upgrade that will transform it to a proof-of-stake network, along with future blockchain upgrades, Bank of America said in a note Friday.
In addition, the investment bank expects rival blockchains such as Binance Smart Chain, Tron, Avalanche and Solana to gain market share until Ethereum overcomes its current headwinds.
“Investors likely realized that Ethereum's seemingly imminent transition to proof-of-stake (PoS) will not address scalability concerns or high transaction fees,” BofA analyst Alkesh Shah wrote in a note to clients.
Traders have highlighted that while the Merge was likely driving short-term price appreciation in ether (ETH), Ethereum's native token, the long-term outlook for the asset remained muted considering a weak macroeconomic sentiment and bitcoin technicals pointing to a downside.
On Friday, crypto and equity markets slid after Federal Reserve Chair Jerome Powell’s hawkish remarks at the long-awaited keynote address at the Fed's Jackson Hole, Wyoming, conference. Bitcoin (BTC) fell about 4% to below $21,000, while ETH dropped 8% to around $1,559.