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In recent weeks, Ethereum has been taking more and more market share from Bitcoin, after the announcement of “The Merge”, a major update. Since then, the interest in Ethereum has skyrocketed. But as the price falls, investors are becoming more cautious about investing in the market. However, that doesn’t mean Ethereum is no longer a good buy.
What Does the Merger Bring?
For many, The Merge is long-awaited news. When the developers announced that the update would take place around September 15, the community cheered. However, The Merge is not only an important upgrade, but also a good buy signal for the digital asset. Why is that?
First, Ethereum is said to use 99.95% less energy than before with the move to Proof of Stake. This means that there is no need to worry about the pollution caused by the digital asset. This takes ETH out of sight of governments that want to allow cryptocurrency mining due to its high energy consumption.
Another good reason is that ETH is not automatically released in the Ethereum 2.0 contract. Currently, more than 11% of the total ETH supply is at stake. More are added every day.
The developers have announced that there will be no payment aspect of the upgrade. This will probably come between 6 months and 1 year after The Merge. Simply put, ETH will remain locked on the network for another 6 months to 1 year. This reduces the circulating supply.
Ethereum still looks bullish
Ethereum remains one of the most bullish cryptocurrencies on the market right now. The net flow on the exchange shows a clear accumulation trend among investors in this area. More than $6.2 billion has been withdrawn from the central exchanges in the past 7 days. The daily net flows follow the same trend.
Ethereum transaction fees have also dropped significantly. That means it’s a good time for investors to start moving assets around the network. As of this writing, ETH transaction fees are 11.74 GWEI or $0.4.
The digital asset was also able to reverse the bears. With the price still comfortably above its 50-day moving average, ETH is one of the few cryptocurrencies in this space that has been able to ease selling pressure on investors.
The closer The Merge gets, the higher the expectations. If the price behaves as it has in the weeks after the announcement, the price of ETH will probably go through $2,000 before The Merge.
Text credit: Newsbtc
Last updated on August 25, 2022
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