Markus Thielen, a Singaporean asset manager at IDEG, is “conservative” about ETH due to the possibility of a consolidation period.
After last week’s increase in Ethereum (ETH) prices, the cryptocurrency may now be in a consolidation period, according to the chief investment officer of asset management firm IDEG.
While Markus Thielen was bullish on ETH prices six weeks ago, he has since become “conservative.”
The thesis is based on macro considerations and price research of the cryptocurrency, stating that the Fed continues to “accelerate its Quantitative Tightening (QT) policy, which drains liquidity,” and that ETH’s prices had encountered technical resistance at approximately $1,800.
The asset management firm also observed that Ethereum has experienced a 47 percent decline in network revenue, a decrease in total volume locked (TVL), and a decrease in stablecoin market capitalization, with USDC witnessing a $1.1 billion outflow over the past week.
The current price increase, according to IDEG’s chief investment officer Markus Thielen, has not been supported by a shift in fundamentals.
Recent Google search data support Thielen’s belief that “Ethereum Merge” hysteria is currently declining, as does his opinion.
Thielen claimed that this “Merge weariness” suggests ETH will undergo a consolidation period prior to the September 19 Merge. But Thielen observed that this may create more options for purchasing:
“A dip by the end of August would ideally position us for another terrific entry-level.”
Thielen also noted on the intriguing similarity between the current ETH price and the Google search results for Ethereum Merge.
“It is a reliable predictor of sentiment and interest, but it will soon become obsolete.” However, it may provide some insight into the timing of the present Ethereum price movement in relation to the event”.
Following the Merge, Thielen believes the primary factor influencing the price of ETH will be the rate of adoption growth.
While gas fees may remain same and the adoption curve may not initially climb as quickly as many anticipate, ETH may be slightly undervalued in terms of pure cashflow.
At the time of writing, the price of ETH is $1,587, a decrease of 6.24 percent over the past 24 hours.
Disclaimer: These are the writer’s opinions and should not be considered investment advice. Readers should do their own research.