Ethereum sags ahead of the merge

Bitcoin hit a bit of a wobble in the past hour as it ran stops after hitting $20,000. That prompted a quick move to $19,631 before a bounce back to $19,900.

Bitcoin was sold hard yesterday — along with everything else — but is down another 1.8% today. The small bounce in equities today is looking vulnerable at the moment with the S&P 500 now barely positive and Nasdaq up 0.4%. The low for bitcoin last week was $18,549 and that leaves some breathing room but BTC can move fast.

All eyes in the crypto space today are on ethereum and the merge into a proof-of-stake model that will use far less electricity. It’s currently targeted for 1 am ET.

Crypto has a bad habit of ‘sell the fact’ trades around events and this one is another risk. It’s fallen in four straight days and that’s a sign that some frong-running is already underway.

What worries me on the chart is a potential head-and-shoulders top that’s shaping up.

There isn’t a clean neckline on the pattern but a break below the $1450-$1350 zone would be problematic, with a sub-$900 target.

I imagine the reaction tomorrow after the merge will go a long way towards determining the trend for the month ahead.