Ethereum (ETH) prices have revisited a key psychological level as they close in on the last market cycle peak.
Ethereum has continued to build on weekend gains during the Monday morning Asian trading session. The asset climbed to $1,412 in a move that has added 20% to its price over the past seven days.
ETH is currently outperforming Bitcoin with a 3.6% gain on the day whereas BTC has dropped half a percent in a fall to $21,253 at the time of press.
Popular crypto analyst and trader ‘Bluntz’ observed that ETH has reclaimed the 200-week moving average which could signal a bottom.
Beware the bull trap
Momentum has been driven by Ethereum’s long-awaited Merge to proof-of-stake which has now been slated for Sept. 19.
Last week, developers successfully ran another shadow fork to test elements of the Merge involving MEV (maximal extractable value). The final phase of testing on the Goerli testnet has been scheduled for Aug. 11.
The bears are not out of the woods yet though as ETH is still down 71.3% from its November all-time high and broader crypto markets are still largely consolidating.
If a final capitulation triggered by further Fed rate hikes and recession news later this month sends Bitcoin back below $20,000 then Ethereum is likely to follow. The three-day pump could be a bull trap since the asset has been in a downtrend for the past eight months and bear markets usually last a bit longer.
Investors have been gradually accumulating ETH, however. According to CoinShares, institutional inflows have been reentering Ethereum-based products and funds while investors have been largely shorting Bitcoin.
Ethereum staking increasing
On July 18, on-chain analytics firm Glassnode reported that the number of addresses holding more than 32 ETH has reached a 16-month high.
32 is the number of tokens required to run a validator node, but with so many exchanges offering staking services, investors can stake with fewer than this.
There is currently 13,089,105 ETH staked according to the Beacon Chain explorer. At current prices, this is worth around $18.3 billion and represents almost 11% of the total circulating supply.
Some have speculated that there will be a big selloff of Ethereum once it gets released from the staking contract after the Merge. However, developers have confirmed that it will not all be unlocked at the same time to ensure network security and consensus.
Disclaimer
All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
Source: https://beincrypto.com/ethereum-merge-hopium-or-bull-trap-eth-prices-up-20-in-a-week/