The Ethereum merger came and went, leaving investors to think about what the next development in the market might look like. In a Cointelegraph Twitter space with Capriole founder Charles Edwards, the analyst stated that the excitement around the Ethereum Merge and the bullish price action were holding hope somewhat across the market. Now that the event has come and gone, the cryptocurrency market has sold out, with Bitcoin (BTC) trading below $20,000 and Ether (ETH) below $1,500.
Eventually, new narratives and market trends will emerge, and if the fundamentals are correct, traders will trade money as these new leaders emerge.
Let’s take a look at some potential pointers.
Where will ex-ETH miners go?
The Ethereum network has successfully switched to a Proof of Stake (PoS) model, which means that miners are not in their pockets but still have their own GPUs and ASICs for mining infrastructure. It is possible that some miners may choose to mine in a different chain instead of selling their equipment.
While they haven’t settled on any particular chain yet, it appears that Ravencoin, Flux, Ethereum Classic, and Ergo are the first. During the merger, each network saw its hash rate rise to an all-time high, as shown below.
ETC hash. Source: 2Miners
ERG fragmentation. Source: 2Miners
RVN Fragmentation. Source: 2Miners
FLUX Fragmentation. Source: 2Miners
The prices of each altcoin have also risen over the past month, with Ravencoin’s RVN up 169%, Ergo’s ERG up 132%, Flux’s up 156%, and Ethereum Classic’s ETC up 135% in the past 90 days.
Interestingly, the hash rate and price fell sharply on September 15th, and at the time of writing, only Flux and RVN appear to be on a recovery. Over the coming weeks and months, it will be interesting to see which of the miners in the network might choose as their new home and the impact that has on the price of the cryptocurrency.
The universe continues to expand
The Cosmos ecosystem continues to expand, which appears to be attracting buyers to ATOM. Since bottoming at $5.50 on June 18, ATOM is up 137.5% and is currently trading above $16. The analysis indicates that investors see the soon-to-be-launched liquidation acquisition, ATOM being used as collateral for the stablecoin mint, the launch of Cosmos Hub 2.0 and the eventual recovery of decentralized finance in general as long-term bullish factors for ATOM’s price.
Buy the rumor, sell the news, or buy a dip?
While the current price action of ETH is less bullish than the consolidation advocates and ETH bulls had been hoping for, the actual switch to PoS appears to have been successful, and perhaps over time, the benefits of PoS will translate into an upward price movement from ETH. According to Jarvis Labs co-founder Ben Lilly, the “Joe Cool movement” for ETH investors won’t be “caught in the coming days. The main player likely to do any kind of crazy activity is the miner. This is a one-time event and it won’t last long.” “.
Lilly explained that:
“Joe Cool’s move is to sit there and buy any kind of hyper-emotional movement. Then sit back and relax.”
In the future, Ether may experience a supply shock and possibly become deflationary. Staking further secures the network while providing guaranteed returns on the assets deposited. In a market stuck in a downtrend, a safe and predictable return may become more attractive.
Essentially, Lilly suggests that it will take some time for the enthusiasm surrounding the merger to settle and investors begin to take advantage of the benefits that the PoS Ethereum network can offer.
What about bitcoin?
In this week’s Bitcoin analysis, I discuss how much has not changed with the price of Bitcoin. Its price has been range bound in the $17,600-$24,400 range for the past three months, and all rallies from every high range since March 29 have been capped by the 200-day moving average and the upper resistance trendline extending from Bitcoin November 2021, the all-time high at $69,400.
BTC/USDT 1-day chart. Source: TradingView
While continued consolidation within the current range can (and usually will) be beneficial for an altcoin, macro tensions may continue to weigh on the cryptocurrency and stock markets. The hot print of the CPI from September 12 could lead to sharper price hikes by the US Federal Reserve, and the potentially harmful impact on stock prices could have an even more severe spillover effect on crypto prices.
Because of this, investors remain highly risk averse for most cryptocurrencies, and a repeat of rejection at the long-term downtrend line and a retest of the $19,000 support could eventually lead to a breakdown of the yearly swing low.
This newsletter was written by Big Smokey, author of The Humble Pontificator Substack and Cointelegraph’s resident newsletter author. Every Friday, Big Smokey will write market insights, guides, analyzes and early bird research on a potential emerging flight