- 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.
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.
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!