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In recent weeks, Ethereum Bitcoin has been losing more and more market share – a consequence of the announcement of “The Merge”, a significant update. Since then, interest in Ethereum has skyrocketed. But with the fall in prices, investors are becoming more and more cautious about investing in the market. However, this does not mean that Ethereum is no longer a good buy.
What does The Merge do?
For many, it is The Merge a message that you have been waiting for a long time. When the developers announced that the update will take place around September 15, the community erupted in cheers. However, The Merge is not only an important upgrade, but also a good buy signal for the digital asset. Why is this so?
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Firstly, the Ethereum with the switch to Proof of Stake, it is said to consume 99.95% less energy than before. This means that there is no need to worry about the environmental pollution caused by the digital asset. This takes ETH out of the field of view of governments that want to sanction the mining of cryptocurrencies due to the high energy consumption.
Another good reason is the fact that the ETH staked on the Ethereum 2.0 contract is not automatically released. Currently, more than 11% of the total ETH supply is staked. More are added every day.
The developers have announced that there will be no withdrawal function for the upgrade. This will probably come 6 months to 1 year after The Merge. Simply put, ETH will remain blocked on the network for another 6 months to 1 year. As a result, the circulating supply decreases.
Ethereum Still Looks Bullish
Ethereum is still one of the most bullish cryptocurrencies on the market at the moment. The net flow on the stock exchange shows a clear trend of accumulation among investors in this area. Thus, over the past 7 days, more than $ 6.2 billion has been withdrawn from the central exchanges. Daily net flows follow the same trend.
The transaction fees of Ethereum have also dropped significantly. This means that it is a good time for investors to move assets over the network. Currently (at the time of writing this article), ETH transaction fees are 11.74 GWEI, or $0.4.
The digital asset was also able to fend off the bears. With the price still comfortably above the 50-day moving average, ETH has been one of the few cryptocurrencies in this space that has been able to ease selling pressure on investors.
The closer The Merge the bigger the expectations are likely to become. If the price behaves as it did in the weeks after the announcement, the ETH price will probably break the $2,000 mark even before The Merge.
Proof of text: Newsbtc
Last updated on August 25, 2022
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