Ethereum is outperforming the broader cryptocurrency market as it enters the much-anticipated Merger, but the overall picture remains largely bearish.
Ethereum (ETH) has gained 48% in the last seven days, surpassing its big brother Bitcoin, which only managed to gain 19% in the same period. It is also up 66% from its market cycle low of $918 on June 19, to the current price of $1549.
However, the current Ether rally could be a bull trap (bull trap) with the cloud macros darkening. A bull trap is a sign that the downturn in a cryptocurrency asset has reversed and is going up when it will actually continue down.
The main driver of the asset’s recent momentum has been related to announcements regarding its final transition to proof-of-stake, which was scheduled for September 19.
The Merger will reduce network energy consumption by more than 99%. However, it won’t necessarily reduce transaction fees significantly, as that will happen when scaling through cropping, which is planned for next year.
On July 19, the Coinbase Merge report explained that the Goerli Testnet Merge, scheduled for August 11, is the next big step, and the final dress rehearsal.
Goerli is the most tested Ethereum environment, with the highest user activity and the closest simulation to reality.
— Crypto Diamond (@ImCryptoDimond) July 19, 2022
Am I the only one who thinks Ethereum is going to start the BULL RUN with its merger??
While the major upgrade is the main driver of Ethereum’s current market outlook, the asset is still trading down 68% from its November 2021 all-time high.
Some also feared that a significant amount of ETH will flood the market after the Merger and its release from its promised smart contracts.
However, 21Shares Research Director Eliézer Ndinga told Cointelegraph that this is unlikely to happen:
“Ether withdrawals will only happen 6-12 months after the Merger, after the Shanghai upgrade. Withdrawals will be limited to six collectors per hour or ~6 minutes to avoid bank runs and keep the network secure. »
There are: Ethereum Developers Confirm Merger Deadline
A recent Finder survey, conducted before the latest rally, shows that there is still a lot of negative sentiment around Ethereum prices in the short term.
The panel of 54 industry experts surveyed believed that ETH would be worth $1,711 by the end of 2022, reach $5,739 in 2025, and then $14,412 in 2030. However, they also believed that it would drop to $675 before the end of the year.
According to Finder, a number of macroeconomic factors could be behind this decline. The US Federal Reserve is expected to raise rates by another 75 basis points at its July 26-27 meeting, which is generally bearish for cryptocurrency markets. If bitcoin falls, Ethereum is sure to follow.
In addition, the US Bureau of Economic Analysis (BEA) will release its second quarter GDP growth forecast on July 28. So we expect another negative quarter, which means the country is in a technical recession, which is also very bad for risky assets like Ethereum.