The merge is close, so it’s time for Ethereum to shine. The second-ever cryptocurrency in terms of market capitalization has overtaken Bitcoin in the past few days. Is the reason for the return of the market’s appetite for risk? Or is it just the fact that the developers of Ethereum announced a specific date for the legendary merger? Let’s examine the numbers, facts, and expert opinions to find out exactly what’s going on.
in Weekly updateArcane Research news release notes that the ETHBTC pair rose “from 0.053 on July 12 to 0.7 on July 19.” It’s at “levels we haven’t seen since mid-May” but why? According to Arcane, “It may be related to increased risk appetite in the market, evidenced by the sharp recovery of the altcoin across the board.” They identified another factor, “Celesius repaid the DeFi loans. This contributed to reducing the downward gravitational force imposed by potential liquidations and the uncertainty associated with contagion.”
And then, of course, there’s merging.
What do experts say about inclusion?
Facts are facts, Ethereum is on. In a previous report, NewsBTC Analyze the market situation:
“Ethereum has now broken above a significant technical point. After trending below the 50-day moving average for the better part of last month, ETH has flipped that technical level and is now sitting comfortably above it. The implication of this was a complete 180 degree turn. From bearish to bullish, especially during the short term.”
As for the possible cause, Arcane Research has already named two. However, the main factor is the possibility of consolidation. Back to weekly update:
On Thursday, July 14, Ethereum Foundation member Tim Beiko suggested September 19 as a tentative launch date for the merger. This may have benefited ETH, leading to an increase last week. Following the announcement, Lido’s ETH token approached ETH parity. “
In another NewsBTC report, We quoted another expert Trying to understand the situation. According to Youwei Yang, Director of Financial Analytics at StoneX, the reasons for the recent increase are:
“The first is the recently announced time to update Ethereum’s “merger,” which should make the network significantly more energy efficient. Yang claims that the “calm down” of macroeconomic concerns is the second.
ETHBTC price chart on Coinbase | Source: ETHBTC by The Weekly Update
Is the Ethereum merger considered a ‘rumor-buying’ event?
Changing from Proof-Of-Work to a Proof-Of-Stake consensus mechanism consumes less power, but brings with it its own set of problems. Discussing these is beyond the scope of this article. The important part of the equation for Ethereum owners is that the merger will finally bring the original staking into the blockchain. Thousands of ETH already trapped in the Beacon Chain will finally get real results, and validators will rise from a new type of user.
Is that enough to justify the price hike? definitely. Is it guaranteed that the merger will take place on the nineteenth of September? Probably not, given that Ethereum has postponed its hard bomb five times already.
ETH price chart for 07/20/2022 on Bitfinex | Source: ETH/USD on TradingView.com
Did the infection happen that sent everything red?
According to Arcane, “The infection now appears to be recovering, with prices stabilizing. This recovery may be seen as a healthy confirmation of a market return to normal as market pressures stabilize.” their interpretation of the situation He may be overly optimistic. The pseudonymous Twitter user who introduces himself as a “Davi major crypto fund trader/analyst who uses Nansen almost daily” thinks more pain is on the way with or without the merger.
There are dozens of wallets like this that 3AC still has with thousands of ETH. It is very likely that all these portfolios will be liquidated in order to pay the amounts owed to creditors. Check how many funds have been transferred from only one wallet. pic.twitter.com/75HkR097zV
– jbjbjb (@bryptobricks) July 19, 2022
The Three Arrows Capital trial is still unfolding, and “3AC still has thousands of ETH. It is very likely that all of these wallets will be liquidated in order to repay the amounts owed to the creditors.” if That’s what happens, it’s “It will cause a severe sell-off across the broader crypto ecosystem, depressing the next catalyst.”
Sorry to rain on the Ethereum parade, but these are the facts. However, we wish you good luck with the merger.
Featured Image by Loic Leray on Unsplash | Charts by TradingView and The Weekly Update