Ethereum Gains Outpace Bitcoin, Dogecoin: Can The Merge Really Be ‘Major Tailwind’ For ETH?
Bitcoin reclaimed the $20,000 mark, while Ethereum traded above $1,500 on Monday evening as the global cryptocurrency market cap rose 4.2% to $985.55 billion.
|Cryptocurrency||24-Hour % Change (+/-)||Price|
|Lido DAO (LDO)||+17.1%||$1.86|
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The two largest cryptocurrencies were in the green at the press time after surviving a day that saw risk assets such as stocks tumble. The S&P 500 and Nasdaq ended Monday down 0.7% and 1%, respectively. At press time, stock futures rose slightly.
“Bitcoin is showing some resilience here as it has clawed back above the $20,000 level, despite widespread stock market weakness. Cryptocurrency traders are not used to seeing Bitcoin withstand a rout on Wall Street, so this could be a promising sign,” said OANDA senior market analyst Edward Moya, in a note, seen by Benzinga.
Michaël van de Poppe noted that Ethereum was showing strength on Monday. The cryptocurrency expects a “few days of consolidation” for the second-largest coin. Van de Poppe sees crucial ETH resistance at $1,650 and a potential move up to the $2,200 mark.
The scenario still stands and could fulfill;
– Few days of consolidation.
– Crucial resistance at $1,650.
Potentially $2,200. pic.twitter.com/s0o63755GE
— Michaël van de Poppe (@CryptoMichNL) August 29, 2022
Justin Bennett reminded his followers on Twitter that altcoins dropped over 90% in the last bear market.
And to anyone who says altcoins won’t pull back that far…
They already did once.
Alts pulled back over 90% during the last bear market. So to think they’ll stop at -74% this time with raging inflation, a global recession, etc. is naive, IMO.
— Justin Bennett (@JustinBennettFX) August 29, 2022
“So to think they’ll stop at -74% this time with raging inflation, a global recession, etc. is naive,” said the trader.
Glassnode said in a weekly blog that Bitcoin user base performance is “lackluster at best.” Investor psychology appears to be dominated by “get my money back” sentiment and a “great degree of spending taking place at and around their cost basis.”
Bitcoin, Net Realized Profit/Loss In Dollars — Courtesy Glassnode
The on-chain analysis firm said Bitcoin investors are realizing aggregate net losses of $220 million a day. Even though this figure is “modest in magnitude” but this amoun of capital outflow suggests that “bulls are fighting an uphill battle.”
Ethereum, which surged relative to the broader cryptocurrency market between June and early August on Merge expectations, has stalled, said Kaiko Research in a note.
The ETH-BTC ratio rose from .05 to .08 in the period but after sanctions on Tornado Cash and related questions on how Ethereum’s transition to proof-of-stake will be affected, the coin’s upward movement has “slowed considerably” and the ratio reversed.
Ethereum To Bitcoin Ratio — Courtesy Glassnode
“In the long term, the upcoming Merge should be a major tailwind for ether as it is expected to reduce the issued supply, improve energy efficiency and lay the foundation for more scalability in the future,” said Kaiko.
Even so, another potential worry for investors is Ethereum’s network growth. Chartist Ali Martinez tweeted that the growth hasn’t been this low in more than two years. Martinez said the last time the number of daily new ETH new addresses was 49,700 was in March 2020.
— Ali Martinez (@ali_charts) August 29, 2022
“A steady decline in the [number] of new addresses created on the [ETH] blockchain tends to lead to a steep price correction over time,” he tweeted.