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The Ethereum rate has grown by 20% over the past week and this morning continued to develop growth, reaching $ 1,412. Euphoria over the upcoming move to Proof-of-Stake or bull trap?
At the time of writing this morning, Ethereum is significantly ahead of Bitcoin in terms of growth rates. At the same time, a popular cryptanalyst and trader under the nickname Bluntz noted that the ETH rate had recovered above the 200-week moving average. Potentially, this could be a signal that the coin has found the bottom.
Beware of the bull trap
Recall that the growth rate of ETH intensified by the end of last week after it became known that the Ethereum blockchain can move to a new algorithm for proof-of-stake (Proof-of-Stake) already September 19. This was reported by one of the developers of the project. Against this background, the ETH rate immediately jumped by more than 12% to $ 1300.
Before moving the main network, the developers plan to complete all updates in the test networks. For example, Goerli’s testnet has yet to undergo a “merge” (the Merge phase) with the new algorithm on August 11.
However, it is too early to celebrate the victory. The ETH rate is still trading 71% below its all-time high seen in November, and the crypto market as a whole continues to be dominated by gloomy sentiment.
Many industry analysts are still waiting for the final capitulation, which will provoke further increases in interest rates by the US Federal Reserve and gloomy news on the topic of recession and inflation. In this case, Bitcoin may again go under the $20,000 mark, and Ethereum will probably also follow it in a southerly direction.
In this case, the 3-day ETH pump may just be a bull trap, as the coin has been in line with the downtrend of the past 8 months, and bear markets tend not to end so quickly.
Quantity ETH on staking grows
However, investors continue to consistently accumulate ETH reserves. According to CoinShares, the capital inflows of institutional investors into Ethereum-based products and funds began to increase again, although investors’ positions on bitcoin remained mostly short.
On July 18, analyst firm Glassnode reported that the number of addresses with more than 32 ETH on its balance sheet reached a 16-month high of 116,895, breaking the previous day’s record.
Recall that 32 is the minimum number of tokens that node validators must have on their balance sheet. However, now a large number of exchanges offer various staking services, so in fact, an investor can steak, even with a smaller number of coins.
According to Beacon Chain, there are currently 13,089,105 ETH placed in staking. At current prices, this is equivalent to about $18.3 billion and accounts for almost 11% of the total number of coins in circulation.
Speculation periodically begins to creep through the market that after the “merger” phase (the Merge) we should expect a powerful wave of Ethereum sales. However, the developers have repeatedly confirmed that the coins will not be unlocked in the “all at once” format in order to maintain the security and operability of the network.
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