Market Minute: Upcoming ‘Merge’ propels ETHBTC to 2021 highs

By FKlivestolearn | Technicity | 16 Aug 2022

The second half of 2022 has seen Ether take the lead in gains as the biggest altcoin transitions to a more scalable network

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Ethereum‘s upcoming Merge has provided the much-needed bullish momentum in not only the pioneering smart contract platform but the Cryptoverse in general. Owing to this positive development, ETH has led its peer Bitcoin in gains accumulated since the most recent bottom reached on June 19. This, in turn, has led the ETHBTC to trade close to its 2021 highs (chart above). A little more on the Merge before we come back to this.

The team of ETH’s core developers has announced a tentative Merge date of September 15 — three days earlier than Ethereum core developer Tim Beiko’s last prediction of September 19. The successful execution of the final testnet Goerli has set things in place for Ethereum’s highly-anticipated Merge. This basically means the transition of the network from a more power-intensive Proof of Work to a more scalable & efficient Proof of Stake (the Merge).

This upgrade has fueled a lot of bullish speculation. Ethereum 2.0 upgrade focuses on improving the speed, efficiency, and scalability of the network. This could be a big improvement for the network considering the high transaction costs have bogged it down every time the activity picks up on the network. The total value locked in the ETH 2.0 deposit contract continues to record new all-time highs — reaching a figure of over 13 million, Glassnode reports.

Coming back to ETHBTC, it is currently trading at 0.078, after recovering from lows of 0.053 on June 18th. According to Arcane research, the ETHBTC price peaked at 0.0886 on December 9th, 2021, 13% higher than today’s level. The current ETHBTC rally peaked at 0.0881 on August 13th following the announcement of the September 15th estimate for the mainnet Merge.

Ethereum has only traded at higher levels compared to BTC for 196 days since May 2016, or 8.62% of all days since May 2016. Since Jan. 1st, 2021, ETH has only closed at higher levels than today’s level 39 times, or 6.59% of all days since Jan. 1st, 2021.

One of the biggest takeaways from this data is the traders/investors wanting more exposure to ETH investing products as it nears the upgrade. It remains to be seen whether ETH is able to penetrate this previous cycle high or reverse. It is quite possible that the merge event might prove to be a tipping point for a short-term ETHBTC trend reversal.

Originally Published on Medium

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FKlivestolearn

I am a prolific Blogger on Substack/Medium with a newsletter. Extensive trading experience in Forex & Stocks based on technical studies. Cryptocurrency trader and Enthusiast, Blockchain/Fintech Evangelist & generally just a Technology Freak.