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.

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“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.

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Ether May Continue to Lose Momentum Until Merge Is Completed, BofA Says

Investors want more clarity around The Merge and its implications, the bank told clients in a research note.

Ether Slides as Grayscale's ETHE Outflows Ramp Up