Is it foolish to expect a massive Ethereum price spike before and after the merger?
The pullback in Ethereum futures shows that traders expect ETH to rise, and everyone wants them "free" proof-of-work coins, but investors should also keep an eye out for bears.
Market analysis
The staggering 85% gain in Ether (ETH) over the past 30 days has surprised even the most optimistic investors, and it makes the $800 range seen in mid-July seem like an eternity . Bulls are now hoping to turn $1,900 to support, but derivatives metrics tell a completely different story, and the data suggests professional traders remain highly skeptical.
Ether price index on 1 day, usd. Source: TradingViewIt's important to remember that the leading cryptocurrency, Bitcoin (BTC), has gained 28% over the same period. Thus, there should be no doubt that the Ether bull run was driven by the expectation of a merger, a transition to a proof-of-stake (PoS) consensus network.
Goerli was the last remaining Ethereum testnet planned to implement the merger, which officially became a proof-of-stake blockchain as of 1:45 UTC on August 11. This last hurdle was cleared without major setbacks, setting a green light for the mainline transition on September 15 or 16.
There is a logic behind the growing expectations of investors for this major historic transition. Such a multi-phase upgrade aims for higher scalability and extremely low overhead through sharding, the parallel processing mechanism. However, the only change in smelting is the complete removal of the tedious mining mechanism.
In a nutshell, the equivalent inflation will be significantly reduced because miners no longer need to be compensated b...
The pullback in Ethereum futures shows that traders expect ETH to rise, and everyone wants them "free" proof-of-work coins, but investors should also keep an eye out for bears.
Market analysis
The staggering 85% gain in Ether (ETH) over the past 30 days has surprised even the most optimistic investors, and it makes the $800 range seen in mid-July seem like an eternity . Bulls are now hoping to turn $1,900 to support, but derivatives metrics tell a completely different story, and the data suggests professional traders remain highly skeptical.
Ether price index on 1 day, usd. Source: TradingViewIt's important to remember that the leading cryptocurrency, Bitcoin (BTC), has gained 28% over the same period. Thus, there should be no doubt that the Ether bull run was driven by the expectation of a merger, a transition to a proof-of-stake (PoS) consensus network.
Goerli was the last remaining Ethereum testnet planned to implement the merger, which officially became a proof-of-stake blockchain as of 1:45 UTC on August 11. This last hurdle was cleared without major setbacks, setting a green light for the mainline transition on September 15 or 16.
There is a logic behind the growing expectations of investors for this major historic transition. Such a multi-phase upgrade aims for higher scalability and extremely low overhead through sharding, the parallel processing mechanism. However, the only change in smelting is the complete removal of the tedious mining mechanism.
In a nutshell, the equivalent inflation will be significantly reduced because miners no longer need to be compensated b...
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