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Ethereum Merge Revisited: Is It Driving Crypto Higher?

Buy Ethereum Here Your Capital Is At Risk
Updated 20 Jul 2022

Key points:

  • Is the Ethereum Merge Driving The Current Crypto Rally?
  • Filling a “Narrative Void”
  • Technically Speaking: Ethereum Bull Breakout, Base and Upside Prospects

The Ethereum merge took another step closer last week as Ethereum developer Tim Beiko proposed 19th September to a proof-of-work protocol. This has seemed to fill a “narrative void,” which has propelled Ethereum notable higher, along with the broader cryptocurrency markets. We look at these developments and the prosects for Ethereum now that a technical base has been secured.

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Is the Ethereum Merge Driving The Current Crypto Rally?

In a post last week, Ethereum Merger Countdown – Are ETH and BTC Looking Bullish?, we highlighted another important step taken in the Ethereum Merge, which is a move from a Proof-of-Work (PoW) to Proof-of-Stake (PoS) system (which would see mining power usage plunge). In a Tweet on Thursday 14th July, Tim Beiko of the Ethereum Foundation (who arranges meetings of the network’s core developers) proposed 19th September as a target date for the Merge. Since then, Ethereum has soared by 40-50% higher.

Also Read: Can Ethereum and Bitcoin Solve Their Energy Use Problem

However, it must be noted that this is not the only factor driving Ethereum and wider cryptocurrency markets higher. Wider financial markets have moved to more of a “risk on” theme over the past 3-4 weeks, but more noticeable since last Wednesday’s release of a particularly “hot” US CPI number. Despite this high inflation print, riskier assets have pushed notably higher, with US and global stock averages rallying, whilst the safe-haven US Dollar has markedly fallen after an aggressive 2022 bull run!

Filling a “Narrative Void”

Are the prospects of the Merge a true reason for Ethereum and the whole crypto market to be rallying? Clearly there is a fundamental positive to the Merge, but it should also be pointed out that the Merge is filling a “narrative void”, which has been evident throughout the 2022 move into a crypto winter. The “narrative” are the stories crypto enthusiasts push regarding how blockchain technology will reshape the world. Whether it is filling a “narrative void” or a truly positive fundamental shift, the ensuing rally from the growing prospect of the Merge is having real technical, chart implications for Ethereum and other crypto markets.

Technically Speaking: Ethereum Bull Breakout, Base and Upside Prospects

In the past week since we last posted our technical update, Ethereum has surged up to 62% (from the 13th July low to yesterday’s peak) and critically broken above notable chart resistances at 1275/79. This has secured a technical base and has been reinforced by a reversal above the bear trend line that comes down from early April. This should open up prospects for further gains through the summer to approach 2015/2161, and possibly for a better recovery run towards 3035/3180!