Ether loses steam days before the merger, Bitcoin remains stable

Ether loses steam days before the merger, Bitcoin remains stable

Since the mostly expected Ethereum merchant may be removed for days, the second largest cryptocurrency has cited the indictment due to drains, since investors question the success of the transition.

Ether lost about 3.5 % on Monday, while Bitcoin added about 2 % to be comfortably above the $ 20,000 mark, a level that analysts have observed closely since its break-in at the beginning of the month. Since the merger is expected to be completed in the next two and a half days, retailers take care.

This also applies to institutional investors who, according to Coinshares, have drawn $ 62 million from ether products in the week until September 9th. This is almost the total amount of weekly drains into crypto investments, which amounted to $ 63 million and marked the fifth week in a row with declines.

The withdrawal of investors from ether "may show the concern of investors that the event could not go as planned," wrote James Butterfill, investment strategist at Coinshares, in a Report Monday.

The merger comes at a particularly turbulent time for crypto, with Clara medalie, strategic initiatives and research director at the data provider Kaiko, butterfill's opinion.

"Ether had a very volatile summer in the run-up to the merger, and the 30-day volatility remains at the highest level since July 2021," Medalie told Blockworks. "The volatility of ether has strongly moved away from Bitcoin, and the spread between the two assets is currently up to date in more than one year."

The ether trade volume, both spot and derivatives, exceeded the Bitcoin volume many times over all summer, as retailers made their predictions before the merger. The open interest for Eternal Ether Futures recently broken through when the trading volume piped up, Medalie found.

"In the past week, the Ether financing rates have fallen on the lowest level for more than a year, which indicates a combination of a declining mood and severe protection by dealers in the expectation of possible problems with the merger," said Medalie. "The Bitcoin financing rates, on the other hand, have recently been turned into the positive because the asset enjoys a outbreak in a bullish mood."

Not everyone thinks that the merger is positive for Ethereum

The fusion-advertised as an update that will make transactions faster, safer and less energy-intensive-is not considered a very positive step by the industry, Nansen researchers stated in a report on Monday.

"Some have argued that Proof-of-Stake also leads to centralization in nature," the researchers wrote in the report. "In view of the recent events in relation to Tornado Cash, many concerns about the transition to POS and the effects of concentrated use on a few players were expressed."

If the regulatory authorities choose to target a validator who maliciously acts against the Ethereum network, the security and decentralization of the entire blockchain is threatened, the researchers added.

retailers will also keep an eye on the economic data this week. The data for the consumer price index is to be published on Tuesday and the data about the consumer mood is expected on Friday. The cryptoma markets have largely understood stocks in recent months because speculation about inflation and monetary policy.

"This week is enormous for crypto and if Bitcoin can stay above the level of $ 21,000 and ether ether $ 1,600, it could pave the way for fresh money that comes into the crypto room," said Edward Moya, Senior Market Analyst at Oanda, in a note Monday. "Many are still skeptical about the September Crypto rebound, but if the price movement does not turn south here, momentum retailers could trigger a decent movement."

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The contribution "Ether Loss Steam Days Before Merge, Bitcoin Holds Steady" is not a financial advice.