Let’s take a look at some of the tendencies that might shape the bitcoin market after the Merge.
The long-awaited Eth2 release finally occurred. While this was happening, market participants were left wondering what the next big thing would be. Charles Edwards, founder of the Capriole Fund, recently informed Cointelegraph via Twitter that the optimistic reaction to the Ethereum Merge and its subsequent price increase held great hopes inside the market.
Meanwhile, the event was a success, but the cryptocurrency community is still pessimistic with Bitcoin prices below $20,000 and Ethereum prices around $1,500. In the end, fresh market narratives and trends will emerge, prompting fundamentals-driven traders to rebalance their portfolios in anticipation of the arrival of the inevitable new market leaders. To that purpose, let’s evaluate a few possible developments.
What Will Happen to All the Former Ethereum Miners?
After a successful Ethereum Merge, the ETH blockchain completed its transition to the PoS (proof-of-stake) protocol. It signifies that miners have closed shop but may still have control of their mining hardware. To be sure, some miners will leave their chains and go to other industries rather than sell their mining equipment.
Even though miners haven’t decided on a single chain yet, Ethereum Classic, Ravencoin, Ergo, and Flux are at the top of their list. The hash rate for each platform increased to new all-time highs in the days leading up to the release of ETH2. Observations from 2miners corroborate this story.
In addition, the value of every alternative cryptocurrency has increased over the past month, with Ravencoin (RVN) seeing a price increase of 169%, Ergo (ERG) increasing by 132%, Flux (+155%), and Ethereum Classic (ETC) increasing by 135%. Both the price and the hash rate dropped dramatically on September 15th, which many people found to be a surprise.
The only two that appeared to recover were RVN and Flux during this publication. It will be fascinating to see which network attracts miners and how this can affect the price of the token in the following months and weeks.
The Expansion of the Cosmos Proceeds Unabatedly
As the Cosmos network expands, more and more people appear to be interested in purchasing ATOM. Since its low of $5.50 on June 18th, the alternative token’s value has increased by 137.5 percent. The alternative token has surpassed $16 as this post was being written.
Long-term optimistic factors for the Cosmos (ATOM) price include the forthcoming launch of liquidity staking, ATOM’s use as stablecoin minting collateral, the launch of Cosmos Hub2.O, and the eventual rebirth on DeFi, according to analysts.
Buy on the Dip or Buy the Rumors?
The transition to PoS appears to have been successful, despite the fact that Ethereum’s current price is less optimistic than ETH bulls and Merge enthusiasts had hoped. As time goes on, the anticipated benefits of bullish activities are likely to be well received.
Founder of Jarvis Labs Ben Lilly has predicted good times ahead for Ethereum investors. The mining industry, he added, is still the most likely to initiate chaotic behavior. He suggested that market participants take it easy, avoid making rash decisions, and instead wait to see what happens.
Potentially deflationary conditions for ETH could emerge in the future after a supply shock. Staking protects the integrity of the network while promising returns on token investments. In a declining market, it may be more profitable to seek out a stable, predictable dividend. Lilly thinks the hype around Merge will die down before market participants begin to take use of the possibilities presented by Ethereum’s PoS.
What about Bitcoin (BTC)?
No significant changes have occurred in Bitcoin throughout the last few trading sessions. Over the past three months, the primary cryptocurrency has traded between $17.6K and $24.4K. The 200-day moving average and the resistance line stretching from BTC’s November (last year) $69K peak have limited all rallies from every range peak since March 29.
While continued consolidation within the current range could be bullish for alts, macro tensions may continue to limit the markets’ ability to move higher or lower. If inflation numbers come in higher than expected on September 12th, the Federal Reserve may decide to raise interest rates more quickly than expected. Further, the potential domino effect on stocks could be a pleasant surprise for the cryptocurrency market’s sensitivity to spillover effects.
Investors are still wary of most cryptocurrencies, so breaches below the yearly low are possible if prices continue to fall in the face of persistent rejection around the long-term negative trendline and subsequent retests of the $19K support level.
In the wake of Ethereum’s Merge, the cryptocurrency industry is likely to undergo some significant changes.