Ethereum [ETH] and the question of whether we can expect March all over again
For those who zoom out ETH’s chart, you’ll discover that its efficiency in July is analogous with its efficiency in March. May this efficiency provide some insights into how ETH will carry out in August?
ETH’s newest rally kicked off in mid-July and managed to push the crypto up by as a lot as 74%. Extra importantly, its value gave the impression to be caught in a low-volatility vary after its sharp crash from April to June.
Equally, ETH rallied by roughly 42% from round mid-March, after being caught in a low-volume vary. It was preceded by a pointy crash between November 2021 and January 2022.
Supply: TradingView
If ETH follows the same sample because it did in March, then August ought to ship a bearish efficiency. Though that is totally attainable, a lot of the dynamics at the moment driving its value motion are completely different now, in comparison with what was the case in March.
The 2 sides of the coin
One of many foremost variations is that ETH has nearly doubled its drop from the ATH. Ethereum plans to roll out the ultimate testnet known as Goerli in the direction of the tip of the primary week of August. The mainnet Merge is anticipated to happen in September. This implies August is a essential month for the community and the altcoin.
Cryptocurrencies typically rally just a few weeks earlier than their native networks undergo a significant improve. The Merge is the largest community improve in Ethereum’s historical past. By the identical premise, we will anticipate ETH to draw a variety of consumers within the weeks forward of the Merge. Maybe, this may even encourage buyers to carry on to their ETH, reasonably than promoting earlier than the Merge.
The aforementioned expectations are according to ETH flows, particularly over the previous couple of days. Regardless of its rally, nevertheless, the variety of lively ETH addresses and receiving addresses fell barely within the final 4 days. That is probably as a result of buyers anticipate some promote stress close to the present month-to-month prime.
Supply: Glassnode
New addresses and addresses holding greater than 1,000 ETH additionally dropped, however they’ve already began recovering.
This confirms that the demand for ETH is powerful, particularly now that the community is within the final stretch earlier than the Merge date.
Supply: Glassnode
Conclusion
The Merge’s impression on ETH’s value motion can’t be understated. Nonetheless, buyers ought to word that ETH remains to be closely pegged to the remainder of the market. Ergo, a number of pricing components will affect its efficiency. Nonetheless, a significant drop could be seen as a chance for buyers to scoop up ETH at a reduction. Such a state of affairs means ETH would probably preserve a wholesome flooring value.
