The second-largest cryptocurrency by market cap, Ethereum, has soared 45 percent during the past week, outperforming the majority of other betable assets. There could be a simple explanation for this:
As Ethereum’s team of developers approaches the conclusion of a multiyear, extremely difficult upgrade, traders are shifting positive.
Ethereum Surge
The second-largest cryptocurrency by market cap, Ethereum, has surged by about 45% over the past week, outperforming the majority of the top 100 crypto assets. While there are many theories surrounding ETH’s bullish trend, one of the main drivers of price movements is the impending Ethereum merger.
Trading in ETH has changed from bearish to bullish as developers get closer to finishing a multi-year, extremely difficult upgrade. The entire ETH supply in profit has now risen to 56% with the intense social expectation of the Merge, from lows of 41% just prior to the current price spike.
ETH/USD trades in new bullish momentum.
According to statistics from Glassnode, a significant clearing out of short positions in the futures market was the reason for Ethereum’s 22 percent gain this week.
Glassnode tweeted:
“Over $98M in short futures positions were liquidated in one hour, pushing $ETH prices up by 12.5%.”
The Number of ETH Addresses in Loss (7d MA) reached a 1-month low of 39,112,029 at press time, further demonstrating ETH’s recent bullish trend.
Source: Glassnode
Since the last actions that will really transfer Ethereum activity to the Beacon Chain are scheduled for September, there is still plenty of time for The Merge. Superphiz.eth, an Ethereum educator, added in a Tweet that Goerli would undergo the merging transfer as the last public testnet around August 11.
The mainnet merge is anticipated to float during the week of September 19 if everything with Goerli goes according to plan.
Related Reading | Ethereum Classic (ETC) Reclaims $3 Billion Market Cap, More Upside To Follow?
Experts Opinion
Youwei Yang, director of financial analytics at StoneX, says that two “certainties” are the cause of this upward rise for EthereumThe first is the recently announced time for the Ethereum “merge” update, which should make the network significantly more energy-efficient. Yang claims that the “calming” of macroeconomic anxieties is the second.
“Actually if you see the price movement tick by tick, this time it’s more like ETH leading BTC [or Bitcoin] instead of the other way around in usual times, so it’s a strong indication of ETH-led bear market rally with the confirmation and sentiment of ETH2.0,” said Yang, referring to post-merge Ethereum.
In his most recent episode of “The Breakdown,” famous podcaster and devoted industry watcher Nathaniel Whittemore made this assertion. There is a growing understanding that “the Merge” might influence markets on Twitter, Discord, and everywhere else people debate cryptocurrencies.
After months of low prices, the event suggests, as Whittemore put it, a “return of optimism” in the cryptocurrency markets. The Merge also fills a “narrative void,” allowing crypto enthusiasts to tell others stories about how this technology is changing the world.
Others believe that the Merge could be causing ETH price to spike due to structural reasons. The upgrade represents a fundamental change in the potential applications of Ethereum by rewarding investors who stake their assets in the network. Even Bitcoin-like deflationary forces that further benefit holders could result from the move. People who are purchasing ETH now in preparation may view it more as an investment than a transaction in this scenario.
Related Reading | Liquidations Cross $230 Million As Ethereum Barrels Past $1,400
Featured image from The Shutterstock, chart from TradingView.com