Round Gold-colored Ethereum Ornament

Is the Merge Event Factored in the Current Ethereum Price? Here is Close Look

  • Eth data shows that 14,066,973 units of Ethers have been staked by 416,471 unique validators. 
  • According to a post by Jeff Dorman, CFA at investment firm Arca, the crypto market is showing signs of decoupling from macroeconomics.
  • Earlier this month, Ethereum saw inflows totaling $16M, enjoying a nearly 7 consecutive week run of inflows totaling $159M.

The Ethereum (ETH) ecosystem is heating up for the largest upgrade dubbed the Merge mid-next month. The asset is trading at $1,229.77, having gained 4.5 percent in the past 30 days. For many crypto investors, the Merge upgrade is perhaps seen as a delayed blessing that has been denied over the years. Moreover, Ethereum network fees are one of the most expensive on the market. 

However, that was slightly rectified with the London hard fork dubbed the EIP-1599. Notably, EIP-1559, Ethereum Improvement Proposal, introduced the transaction base fee, miners’ tip, and transfer fee cap.

With the Merge, after a series of successful testnets, developers are positive that proof of staking will seamlessly transition from the current proof of work. Moreover, Eth data shows that 14,066,973 units of Ethers have been staked by 416,471 unique validators. 

Currently, Ethereum stakers earn approximately 4.1 percent Annual Percentage Rate (APR). Hereby attracting major global institutional and retail investors.

According to a post by Jeff Dorman, CFA at investment firm Arca, the crypto market is showing signs of decoupling from macroeconomics.

Closer Look at Ethereum Price Action

According to Dorman, different narratives coupled with changing macroeconomic factors have changed in the past few months.

“From November 2021 to May 2022, it was an all-one trade for risk assets. Inflation anticipation was higher than expected, the FOMC responded late but aggressively, and every asset class moved together (rates, equities, commodities, the U.S. dollar, digital assets),” he said.

He added that three major events since the beginning of this year have changed investors’ mindsets.

  • The Terra Luna/UST fallout and subsequent defaults at Three Arrows, Celsius, Voyageur, and a slew of others
  • The ETH 2.0 merge date was finally set.
  • The “peak inflation” narrative began, marking an end to the market’s fear of rising rates and a super hawkish Fed

Following these sentiments, crypto believers have increased their exposure in the past few months. Earlier this month, Ethereum saw inflows totaling $16M, enjoying a nearly 7 consecutive week run of inflows totaling $159M.

“We believe this turn-around in investor sentiment is due to greater clarity on the timing of The Merge,” CoinShares said.

For comparison purposes, Bitcoin products saw outflows totalling $8.5M during the same period that Eth recorded major inflows.

Worth noting, that Eth has a market capitalization of approximately $195 billion and a dominance of 18.29 percent. As of today, 2,594,440.95 units of ETH have been burned. Thereby increasing the overall demand for Ether and its products.

From a technical standpoint, Ether has 119846% of all time records according to data by TradingView.

The digital asset has however lost 66 percent from its all-time high recorded late last year. Worth noting, that Ether’s price dipped below the 2017 bull market’s ATH, a scenario that has since complicated most analyses. Popular crypto analyst PlanB is a testimony.

With increased staking and more speculation on the Merge event, the Ethereum price may be revving for a major outburst. Some analysts forecast Ethereum will outperform Bitcoin in the next few years.

Rebecca Davidson Verified

Rebecca is a Senior Staff Writer at BitcoinWisdom, working hard to bring you the latest breaking news in the cryptocurrency market. In the words of Elon Musk “Buy stock in several companies that make products & services that *you* believe in. Only sell if you think their products & services are trending worse. Don’t panic when the market does. This will serve you well in the long-term.”

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