Ethereum surged 47% in the last week, what’s behind the rally?
Ether, the second-largest cryptocurrency by market cap, is up 47% in the last week
Ether’s rally is connected to a larger bullish trend in the broader crypto markets but experts say the native coin of the Ethereum network has outperformed its peers due to developers signalling a final date for the long-awaited Ethereum Merge
The Ethereum Merge may happen 19 September 2022, an event that investors argue may further drive the market
The Ethereum Merge may finally happen in September after many years of testing. This was revealed in an open call between Ethereum developers last week. Ether has since rallied to $1,593, a 47% increase from its price last week.
The majority of cryptocurrencies are in the green this week after a bull run in the crypto markets, with Bitcoin up almost 20% from its price last week. Ether’s divergence from the rest of the market may be due to the announcement of the final Merge date.
“If you see the price movement tick by tick, this time it’s more like ETH leading BTC [Bitcoin] instead of the other way around in usual times,” Youwei Yang, financial analytics director at StoneX, told Fortune. “It’s a strong indication of ETH-led bear market rally with the confirmation and sentiment of ETH2.0.”
Others have warned that the rally may be a premature reaction to the hype surrounding the merge. “While the price action of Ethereum certainly gives hope for the overall market to maybe turn a corner in the next few weeks, the sudden jump is mostly motivated by hype and perhaps a lack of understanding of what ‘The Merge’ will actually do,” Martin Hiesboeck, head of blockchain and crypto research at Uphold, explained to Next Advisor.
The Ethereum Merge is similar to the discontinuation of an old computer operating system and replacing it with a new one. Developers have to run one last test on 11 August before the final merge, possibly scheduled for September. If successful, the Merge will transition the Ethereum network from proof of work to proof of stake.