The Ethereum Merge has completed, leaving investors to worry about the subsequent market trend. Capriole Fund founder Charles Edwards stated that enthusiasm about the Ethereum Merge and its strong price movement had slightly bolstered market optimism. Now that the event has concluded, the cryptocurrency market is declining, with Bitcoin (BTC) trading below $20,000 and Ether (ETH) trading below $1,500.
Eventually, new narratives and market trends will develop, and if the underlying conditions are favourable, traders will rebalance their portfolios when these new leaders emerge.
Let’s examine many probable trends.
Where will ETH miners be employed?
The Ethereum network successfully transitioned to a proof-of-stake (PoS)mechanism, meaning miners are out of pocket but may still own their GPUs and ASICs mining gear. Miners can opt to mine on a separate chain instead of selling their equipment.
Although they have not yet decided on a specific chain, Ravencoin, Flux, Ethereum Classic, and Ergo appear to be the frontrunners. As illustrated here, before the Merge, each network’s hash rate reached new all-time highs.
ETC hashrate. Source: 2Miners
ERG hashrate. Source: 2Miners
RVN hashrate. Source: 2Miners
FLUX hashrate. Source: 2Miners
Ravencoin (RVN) is up 169%, Ergo (ERG) is up 132%, Flux (ZelCash) is up 156%, and Ethereum Classic (ETC) is up 135% over the last month.
Curiously, the hash rate and price fell drastically on September 15, and only ZelCash and RVN appear to rebound. In the following weeks and months, it will be fascinating to observe which network miners select as their new home and how this affects the cryptocurrency’s price.
The universe continues to grow.
The Cosmos environment continues to grow, which appears to entice purchasers. Since bottoming out on June 18 at $5.50, ATOM’s price has increased 137.5% and is now trading above $16. Analysis indicates that investors regard the imminent introduction of liquid staking, the usage of ATOM as collateral for stablecoin minting, the launch of Cosmos Hub 2.0, and the ultimate resurgence of decentralised finance (DeFi) as bullish long-term drivers for the ATOM price.
Purchase the dip?
While ETH’s present price movement is less optimistic than Merge advocates and ETH bulls may have wanted, the actual transition to PoS looks to have been a success, and the benefits of PoS may eventually transfer into bullish price action for ETH. According to Ben Lilly, co-founder of Jarvis Labs, the “Joe Cool” approach for ETH investors is not to get caught up in the days ahead. The miner is the character who is most likely to engage in a bizarre action. This is a one-time occurrence that will be brief.
According to Lilly, the Joe Cool maneuver is to sit there and accept any highly emotional action. Then take it easy and relax.
Ether may undergo a supply shock and become deflationary in the future. Staking increases the network’s security while guaranteeing returns on deposited funds. In a market mired in decline, it seems more enticing to source a stable, predictable dividend.
It will take some time for the excitement around the Merge to subside and for investors to begin profiting from the potential benefits of the PoS Ethereum network.
What’s up with Bitcoin?
In this week’s Bitcoin study, I noted how the price of Bitcoin has not moved significantly. Since March 29, all rallies out of each range-high have been limited by the 200-day moving average and an overhead resistance trendline extending from Bitcoin’s all-time high in November 2021 ($69,400).
BTC/USDT 1-day chart. Source: TradingView
Although further consolidation inside the present range might be (and generally would be) positive for cryptocurrencies, macro tensions continue to weigh on crypto and equity markets. The hot consumer price index reading from September 12 might lead to more aggressive rate rises from the United States Federal Reserve. The knock-on effect on stock prices could impact cryptocurrency values more drastically.
As a consequence, investors remain risk-averse toward the majority of cryptocurrencies, and, probably, repeated rejections at the long-term declining trendline and additional retests of the $19,000 support might finally result in a fall below the annual swing low.