What's next for Bitcoin and the crypto market now that the Ethereum merger is complete?

What’s next for Bitcoin and the crypto market now that the Ethereum merger is complete?

The Ethereum merger has come and gone, leaving investors wondering what the next trending market development might look like. In a corner-telegraph Twitter space with the founder of the Capriole Fund, Charles Edwards, the analyst mentioned that the excitement over the Ethereum merger and its bullish price action had somewhat kept hopes in the market. Now that the event has come and gone, the crypto market has sold off, with the price of 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 good, traders will rotate funds as these new leaders emerge.

Let’s take a look at some potential trends.

Where will former ETH miners go?

The Ethereum network has successfully transitioned to a proof-of-stake (PoS) model, meaning miners are paid out but may still be in possession of their GPU and ASIC mining infrastructure. It is possible that some miners choose to mine on a different chain instead of selling their equipment.

Although they haven’t picked a particular channel yet, Ravencoin, Flux, Ethereum Classic, and Ergo seem to be the favorites. Prior to the merger, each network saw its hash rate reach new all-time highs, as shown below.

Hash rate ETC. Source: 2Miners
ERG hash rate. Source: 2Miners
RVN hash rate. Source: 2Miners
FLUX hash rate. 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 up 156% and ETC Ethereum Classic up 135% in the last 90 days.

Interestingly, the hash rate and price fell sharply on September 15, and at the time of writing, only Flux and RVN appear to be bouncing back. Over the coming weeks and months, it will be interesting to see which network miners eventually choose as their new home and the impact this has on the price of the cryptocurrency.

The Cosmos continues to expand

The Cosmos ecosystem continues to grow, which seems to be attracting buyers to ATOM. Since hitting a low of $5.50 on June 18, ATOM’s price has gained 137.5% and is currently trading above $16. The analysis suggests that investors view the soon-to-be-launched liquid staking, ATOM being used as collateral for the minting of stablecoins, the launch of Cosmos Hub 2.0 and the eventual recovery of decentralized finance in general as long-term bullish factors. term for the ATOM price.

Buy the rumor and sell the news, or buy the drop?

While the current ETH price action is less bullish than Merge proponents and ETH bulls might have hoped, the actual move to PoS appears to have been successful, and perhaps over time, the benefits of PoS will translate into bullish ETH price action. According to Jarvis Labs co-founder Ben Lilly, the “Joe Cool move” for ETH investors is not to “get caught up in the days ahead.” The main actor likely to do any kind of crazy activity is the miner. And it is a one-time event that will be short-lived.

Lilly explained that:

“The Joe Cool move is all about sitting there and buying any kind of overly emotional move. So sit back and relax.

Going forward, Ether may experience a supply shock and possibly become deflationary. Staking further secures the network while providing guaranteed returns on deposited assets. In a market stuck in a downtrend, the search for a safe and predictable return may become more attractive.

Essentially, Lilly is suggesting that it will take time for the excitement surrounding the merger to settle in and for investors to start capitalizing on the benefits the Ethereum PoS network could provide.

What about bitcoin?

In this week’s Bitcoin Analysis, I explained how little has really changed with Bitcoin’s price. Its price has remained in the $17,600-$24,400 range for the past three months, and all rallies outside of each high range since March 29 have been capped by the 200-day moving average and a trendline. of aerial resistance that extends from Bitcoin. The November 2021 all-time high at $69,400.

BTC/USDT 1-day chart. Source: Trading View

While continued consolidation in the current range could (and generally will) be beneficial for altcoins, macro tensions could continue to weigh on crypto and equity markets. The September 12 consumer price index hot print could lead to more aggressive rate hikes from the U.S. Federal Reserve, and the potential ripple effect on stock prices could have an even bigger ripple effect on crypto prices.

For this reason, investors remain largely risk averse towards most cryptocurrencies, and it is possible that repeated rejections at the long-term descending trendline and retesting of the 19,000 support $ could eventually lead to a breakdown below the yearly low.

This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter writer at Cointelegraph. Every Friday, Big Smokey will write market insights, practical trend tips, analysis, and early research on potential emerging trends in the crypto market.

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