Ethereum price hit a 7-month high on Friday as the bulls eye a trip north of $300 in the near future. The banking giant JP Morgan is in negotiations to merge its blockchain unit with the software developer ConsenSys, founded by Ethereum co-founder Joseph Lubin.
Fundamental analysis: JP Morgan deal could be a game-changer
It has been reported this week that the banking behemoth JP Morgan is in the process of merging its blockchain unit, Quorum, with a major software developer ConsenSys, which has close ties to Ethereum.
Accordingly, the two sides may finalize the merging process by Q3 this year. The financial terms of the deal are still unclear, Reuters reports.
“At the end of a bear cycle, consolidation is usually the most organic way out for a lot of businesses. This is an overdue indicator for the start of a new market cycle,” Gregory Klumov, CEO of Stasis, said on the proposed merger.
“I suspect that JPM’s internal effort, Quorum, wasn’t living up to the expectations laid out at inception. Consensys had cash flow problems, which JPM can solve immediately; in turn, JPM gets the world-class team that they sorely needed”.
Quorum already uses the Ethereum blockchain network and it is mainly used to connect around 300 banks and financial institutions through the “Interbank Information Network”. Moreover, Quorum hosts JPM Coin, a digital coin created by the bank to facilitate its native monetary transactions.
Around 25 people work on Quorum in different capacities globally. It is still unclear whether they will join Consensus after the deal is completed.
Technical analysis: Bulls eye $310 next
Ethereum price has been moving higher in the past few weeks, alongside the rest of the crypto market, on coronavirus fears. Investors see crypto assets as digital gold and would rather have their funds invested into crypto than high-risk assets.
Moreover, the price gained an additional 30%, traveling from $220 to nearly $290 on the JP Morgan report. In the meantime, the price has pulled back from the highs and trades in $260s.
The world’s second largest digital coin is now up 15% this month, after gaining more than 20% in January. If $290 is broken and investors continue to buy Ethereum, then bulls will aim for $310 as the next layer of resistance. On the downside, the broken 100-WMA at $256 will provide a decent support to the bulls.
Summary
JP Morgan is in talks to merge its blockchain unit, Quorum, with software development company Consensys. Both companies use the Ethereum blockchain network, which prompted the Ethereum price to gain around 30% and hit a 7-month high of $290.
