Ethereum Gains Over Bitcoin, Dogecoin As It Nears Key Milestone: Analyst Warns Things Could Go Downhill After Merge

Zinger Key Points
  • Weakness in ETH indicates the Merge could be a 'sell the event' moment, says OANDA analyst
  • Cryptos continue to track US stock futures
  • Investors eye slew of economic data on Thursday morning

Major coins were in the green Wednesday evening as the global cryptocurrency market cap rose 1.5% to $1 trillion at 8:20 p.m. EDT.

Price Performance Of Major Coins
Coin 24-hour 7-day Price
Bitcoin BTC/USD 0.3% 4.7% $20,264.02
Ethereum ETH/USD 4.4% 0.7% $1,644.77
Dogecoin DOGE/USD 2.6% 0.1% $0.06
Top 24-Hour Gainers (Data via CoinMarketCap)
Cryptocurrency 24-Hour % Change (+/-) Price
Celsius (LUNC) +27.8% $1.87
Ravencoin (RVN) +12.01% $0.07
Ethereum Classic (ETC) +10.5% ​​$39.20

See Also: Best Crypto Debit Cards

Why It Matters: Ethereum intraday gains outstripped that of Bitcoin hours ahead of “The Merge” — which transitions the second-largest cryptocurrency from a proof-of-work framework to a proof-of-state mechanism.

Cryptocurrencies continued to track U.S. stock futures, which were up, at the time of writing. On Wednesday, after a volatile session, the S&P 500 and Nasdaq ended 0.3% and 0.7% higher, respectively.

Thursday saw the release of the Producer Price Index (PPI) data for August which fell 0.1% month-over-month compared to a 0.4% fall in July. 

Investors are waiting for a slew of economic data on Thursday morning such as retail sales, jobless claims, import prices and the Philadelphia Fed manufacturing survey.

“Bitcoin’s best case scenario was for the Fed’s soft landing to happen and now that seems less likely as the risk of recession is growing. A broader slowdown is hitting Wall Street and that should keep Bitcoin grounded and stuck in this crypto winter,” said Edward Moya, a senior market analyst at OANDA, in a note seen by Benzinga.

On the imminent Ethereum merge, Moya said, “Ethereum’s Merge should be a pivotal moment for the cryptoverse and its current weakness is more likely reflecting investor expectations that we will see a classic ‘sell the event’ reaction once the Merge is done.”

“Ethereum will likely continue to chip away at Bitcoin’s lead as the top crypto, but chances of a 'flippening' will have to wait a couple more years.”

A Twitter poll conducted by Justin Bennett appears to concur with Moya’s assessment that The Merge is a “sell the event” phenomenon as far as price action goes.

A majority, 49.2%, of 2,330 respondents on the trader’s poll said ETH will dump post the upgrade, while 29.2% said it would Pump. 21.6% said it was a “non-event.”

Michaël van de Poppe  explained on Twitter that the funding rate is “ultra negative” on Ethereum because people have spot ETH for an anticipated airdrop.”People hedge with shorts on $ETH to cover their positions. Risk-free trade.”

The cryptocurrency trader said in a separate tweet that the funding rate on ETH is negative 0.2% as “everyone is shorting the Merge.”

Negative funding rates under 0 mean that short sentiment is dominant while rates over 0 indicate longs are dominant.

Willy Woo tweeted Wednesday, “Historically, bottoms coincide with short-term holders having a lower cost basis than long-term holders.”

“We are close, but not there yet. Some more time to burn,” said the popular Bitcoin analyst.

Read Next: Bitcoin Mining Difficulty Hits All-Time High Even As Price Plummets

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