Make Kitco Your Homepage

Ethereum price surges ahead of the Merge upgrade, Bitcoin rallies to $22k

Kitco News

(Kitco News) The crypto market is seeing an uptick in sentiment as two of the world's largest cryptocurrencies post solid gains, with Ethereum up more than 26% and Bitcoin 6% in the last seven days.

Ethereum's jump coincided with some clarity around the upcoming Merge.

The Merge will see Ethereum transition to the more energy-efficient proof-of-stake protocol from the energy-intensive proof-of-work protocol, which Bitcoin also uses. The energy consumption post-Merge will drop by 99.5%, and the issuance of new ETH tokens will be cut by about 90%, with many analysts projecting the price of Ethereum to surge.

To read more about the Merge and what it means for the crypto market, click here

The big news that preceded that rally was Ethereum developer Tim Beiko estimating the Merge to take place on September 19. That date was shared by Beiko during the Ethereum developers' call on Thursday. It is a soft timeline and is not final.

Following the news, Ethereum began to climb, last trading at $1,480, up nearly 10% on the day and more than 26% during the previous seven days.

Analysis of Ethereum price action pointed to "whales" — large investors — buying up the token ahead of the Merge.

"On-chain data points to large investors looking to increase their exposure to crypto, in particular to ETH," Lucas Outumuro, head of research at IntoTheBlock, said in his Friday newsletter. "The total ETH balance held by addresses labeled as whales reached an all-time high this week. Addresses holding over 1% of the ETH in circulation have increased their positions."

Bitcoin is also seeing a relief rally as prices climb to above $22,000, up nearly 5% in the last 24 hours.

The fact that the rally comes after another surprising inflation data out of the U.S., with the CPI at 9.1% in June instead of the estimated 8.8%, could be a sign that a price bottom is in place for crypto, said Marcus Sotiriou, analyst at GlobalBlock.

"The result of [the inflation data] is another blow to economic and social well-being, as the Federal Reserve are forced to be more aggressive. However, Bitcoin has risen by over 10% since the news and Ethereum has climbed by almost 40%. When the market starts reacting positively to negative news, this is a signal that a local bottom could be in for now, as fear may have caused the news to be priced in," Sotiriou wrote in a note Monday.

However, more sideways price action is still very likely, according to Scott Melker, independent market analyst and the host of The Wolf Of All Streets podcast.

"[Bitcoin] price is still trading below the 200 MA on the weekly, with 5 weekly closes below in a row … We are a long way from breaking bearish market structure and making a higher high. Weekly volume was unimpressive last week, so we will see what this week has in store for us," he said Monday.

Other cryptocurrencies also recovered, with Polygon up 24% on the day and 64% during the last seven days. Solana was up nearly 7% on the day, and Cardano was up 9% on the day.

Disclaimer: The views expressed in this article are those of the author and may not reflect those of Kitco Metals Inc. The author has made every effort to ensure accuracy of information provided; however, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation to make any exchange in commodities, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept culpability for losses and/ or damages arising from the use of this publication.