The Ethereum Merge came and went, leaving investors to ponder what the next trending development in the market could look like. Now that the event has come and gone, the crypto market has been selling off, with Bitcoin’s (BTC) price trading below $20,000 and Ether’s (ETH) under $1,500.
Eventually, new narratives and market trends will emerge, and if the fundamentals are right, traders will rotate funds as these new leaders emerge.
Where will the former ETH miners go?
The Ethereum network successfully shifted to a proof-of-stake (PoS) model, meaning miners are out of pocket but still possibly in possession of their GPUs and ASICs mining infrastructure. It’s possible that some miners might elect to mine on a different chain instead of selling their gear.
While they haven’t settled on any particular chain just yet, Ravencoin, Flux, Ethereum Classic and Ergo seem to be the frontrunners. Leading into the Merge, each network saw its hash rate rise to new all-time highs, as shown below.
Prices of each altcoin also rallied over the past month, with Ravencoin’s RVN up 169%, Ergo’s ERG added 132%, Flux gained 156%, and Ethereum Classic’s ETC rallied 135% in the past 90-days.
Interestingly, the hash rate and price dropped sharply on Sept.15, and at the time of writing, just Flux and RVN appear to be rebounding. Over the coming weeks and months, it will be interesting to see which network miners possibly select as their new home and the impact this has on the cryptocurrency’s price.
The Cosmos continues to expand
The Cosmos ecosystem continues to expand, which appears to be attracting buyers to ATOM. Since bottoming at $5.50 on June 18, ATOM’s price has gained 137.5% and, currently, is trading above $16. Analysis suggests that investors view the soon-to-launch liquid staking, ATOM being used as collateral for stablecoin minting, the launch of Cosmos Hub 2.0 and the eventual recovery of decentralized finance in general as bullish long-term factors for ATOM price.
What about Bitcoin?
Its price has remained range-bound in the $17,600–$24,400 range for the past three months, and all rallies out of each range-high since March 29 have been capped by the 200-day moving average and an overhead resistance trendline that extends from Bitcoin’s November 2021 all-time high at $69,400.
While continued consolidation within the current range could (and would typically) be good for altcoins, macro tensions may continue to weigh on crypto and equities markets. The hot consumer price index print from Sept. 12 could lead to more aggressive rate hikes from the United States Federal Reserve, and the potential knock-on effect on stock prices could have an even sharper spillover effect on crypto prices.
For this reason, investors remain largely risk-averse to most cryptocurrencies, and it is possible that repeat rejections at the long-term descending trendline and further retests of the $19,000 support could eventually result in a breakdown below the yearly swing low.
