The Ethereum Merge was a failure, and investors are left wondering what the next market trend could be. Charles Edwards, founder of Capriole, shared his excitement about the Ethereum Merge’s bullish price action in a Cointelegraph Twitter Space. This analyst said that the market had been somewhat held back by the hype. The crypto market is now selling off with Bitcoin (BTC) trading below $20,000 and Ether (ETH) trading under $1,500.
Market trends and new narratives will eventually emerge. If the fundamentals are correct, traders will be able to rotate funds as new leaders emerge.
Let’s look at some potential trends.
Where will the former ETH miners go now?
The Ethereum network successfully switched to a Proof-of-Stake (PoS), meaning that miners are now out of pocket, but may still have their GPUs and ASICs mining infrastructure. Some miners may choose to mine on another chain, rather than selling their equipment.
Although they aren’t yet settled on a particular chain, Ergo, Flux and Ethereum Classic seem to be the top contenders. As shown below, each network saw their hash rates rise to all-time highs leading up to the Merge.
ETC hashrate. Source: 2Miners
ERG hashrate. Source: 2Miners
RVN hashrate. Source: 2Miners
FLUX hashrate. Source: 2Miners
The prices of all altcoins also rose over the past month. Ravencoin’s RVN was up 169%, Ergo’s ERG increased 132%, Flux gained 15%, and Ethereum Classic’s ETC rallied 13% in the past 90 days.
It is interesting to note that the price and hash rate dropped sharply on September 15. At the time of writing only Flux and RVN seem to be recovering. It will be interesting to watch the changes in the home of network miners and their impact on cryptocurrency’s price over the next weeks and months.
The Cosmos expands
Cosmos continues to grow, which seems to be attracting ATOM buyers. ATOM’s current price is above $16 after it climbed 137.5% from $5.50 on June 18. Analysts believe that ATOM’s soon-to-launch liquid staking and ATOM being used to collateral for stablecoin mining, Cosmos Hub 2.0 launch, and eventual recovery of decentralized financing in general are bullish long-term factors.
Sell the news and buy the rumor, or purchase the dip.
Although ETH’s current price action may be less bullish than Merge supporters or ETH bulls might hope, the actual shift from PoS seems to have been a success. Perhaps over time, the benefits to PoS will translate into bullish price action for ETH. Jarvis Labs cofounder Ben Lilly says that the “Joe Cool” move for ETH investors should not be to “get caught-up in the days ahead. The miner is the main player most likely to engage in any kind of crazy activity. This is a rare event and will be brief.
Lilly explained this:
Joe Cool’s move is to buy any overly emotional movement. Relax and enjoy the ride.
Ether may experience a supply shock in the future and could become deflationary. Further staking secures Ether’s network and guarantees returns on all deposited assets. A stable, predictable yield can be more appealing in a market stuck in a downtrend.
Lilly suggests that investors will need to wait for the Merge’s excitement to subside before they can start to reap the rewards that the PoS Ethereum network might offer.
What about Bitcoin?
This week’s Bitcoin analysis focuses on how little has changed in Bitcoin’s price. For the past three months, its price has been range-bound between $17,600 and $24,400. All rallies beyond March 29’s range-highs have been stopped by the 200-day moving mean and an overhead resistance trendline, which extends from Bitcoin’s November 2021 all time high of $69,400.
BTC/USDT 1-day chart. Source: TradingView
Although altcoins could continue to consolidate within the current range, it would be a good thing for them. However, macro tensions will continue to impact crypto and equities markets. The US Federal Reserve could increase interest rates by imposing more aggressive measures on September 12. A hot consumer price index print could also have a significant impact on stock prices, which could cause a stronger spillover to crypto prices.
Investors remain cautious about cryptocurrencies because of this. It is possible for investors to reject the long-term trendline, descending trendline, or retest the $19,000 support again, which could lead to a collapse below the annual swing low.
Big Smokey, author of The Humble Pontificator Substack as well as resident newsletter author at Cointelegraph, wrote this newsletter. Big Smokey will be writing market insights, trending tips, analyses, and early-bird research about emerging trends in the crypto market every Friday.
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