Whale movements and analysts suggest that ETH could dip during and after the Merge
While excitement builds towards the Ethereum Merge date which is less than a month away, market anticipation hasn’t been convincingly positive. As a matter of fact, according to recent data, sellers might be pining for the Merge rather than stacking up.
Whale Movements Suggest Possible Drop in Ether Price
According to data from blockchain analytics Santiment, previous bullish build-up prior to the Merge appears to be dropping.
🔄 The gap between #Ethereum’s top 10 largest non-exchange addresses & exchange addresses is closing as we head toward the #merge in 3 weeks. Since May 10th, these top non-exchange $ETH addresses hold 11% less coins, & top exchange addresses hold 78% more. https://t.co/k5OlJ1hG3D pic.twitter.com/XOAVhXaKPG
— Santiment (@santimentfeed) August 24, 2022
Notably, Santiment’s data revealed that ETH holdings belonging to non-exchange whale addresses have declined by 11% in past weeks. These wallet addresses are reportedly transferring large amounts of Ether to exchange wallet addresses. Consequently, these movement has caused exchanges’ ETH holdings to spike by more than 78%.
Usually, when such movements take place, it can be an indication that traders expect the market to take a bearish turn very soon. In other words, potential sellers are transfering their tokens to exchanges to sell them for profit.
I think #Ethereum will drop so hard on the Merge day.
The whole anticipation is getting not bought up on the spot market but on the futures market.
— Crypto Rover (@rovercrc) August 23, 2022
The Merge and Ethereum’s Scalability Issues
Although the imminent transition is unarguably a significant milestone for Ethereum, it is not the ultimate end to Ethereum’s scalability issues. Indeed, the Merge is merely Phase 2 in Ethereum’s 3-phase transition to the energy-efficient Proof-of-Stake mining consensus.
This journey began in December 2020 when phase 1, the Ethereum 2.0 Beacon Chain, a PoS blockchain launched. Phase 2, The final merge should have followed in 2021 but it encountered numerous delays. After several successful testnet integrations, however, devs finally slated the Merge for September 15th this year.
Phase 3 and Ethereum’s Green Future
The final phase, loosely dubbed the Last Phase to Serenity, has been touted by devs to finalize Ethereum’s resolution of its scalability issues. It will involve features like sharding to resolve the problem of high gas fees and increase Ethereum’s transaction capacity.
Regardless, the Merge remains a significant upgrade in its own right. A successful Merge means the Ethereum ecosystem’s blockchain energy consumption could reduce by 99%. While market anticipation might not be as earlier expected, it is yet undoubtedly a historic moment both for Ethereum and the larger crypto space.