Overview
- Will the Merge be a “buy the rumor, sell the news” event?
- Bitcoin pumps spectacularly
- Vitalik makes a surprise appearance.
- Guess who’s buying more Bitcoin?
Good morning Banter Fam,
The Ethereum Merge is right around the corner, and with it comes a significant degree of attention from speculators who want to make profits. So, what’s the best way to prepare?
How about we dive into the data and try to spot an edge.
The Merge: “A buy the rumor, sell the news” event? Part 2 of 2.
Part 1 is available here.
Probability of a successful merge.
To help us find the probability of a successful merge, we can look at the price of the ETH-POW token as a hedge against failure. The current price of the ETH-POW token is $25.65. So with the price of ETH currently at $1,765.00, the equation goes as follows:
$25.65 ETH-POW / $1765.00 ETH = 0.016 or 1.6%.
- The market is pricing a 1.6% probability that The Merge is a failure.
- In turn, the market is pricing a 98.4% probability the Ethereum Merge is successful. Not too shabby.
So, to the moon, correct? Well, not so fast. Many other factors will affect the price:
| Positive factors that contribute to increased BUY pressure | Negative factors that contribute to increased SELL pressure. |
| The success of the Merge proves the ability of the Ethereum developers | Those who will realize that the Merge does not improve gas prices. |
| ESG Narrative (White House pushing anti-mining campaign) | Retail investors can exacerbate a slight sell-off (fear). |
| ESG mandate. Some institutional investors will be able to invest in ETH. | Hiccups during the Merge could provoke a sell-off. |
| All the narratives surrounding the structural side of Ethereum post-merge: 90% issuance reductionIncreased staking APY (8-12%)Possibly deflationary tokenomics | Professional traders gamify the event by pumping ETH price and then selling it off. |
Conclusion.
Price action is very unpredictable in the short term. The Merge will be no different. Therefore, it is best not to try and guess what will happen, but to be ready for various outcomes. The positive contributing factors are strong, and hodling ETH through volatility is likely the best and easiest choice.
The possibility of a significant “sell the news” event appears low because of all the positive fundamentals.
BUT, suppose professional investors pump the price of ETH pre-merge, the likelihood of a sell-off increases. So it might be worth taking some partial profits >$2,200.
If the Merge happens to be delayed and price drops substantially, it could prove to be a good entry point <$1200.
Good luck out there!
Market update 🌍
Major macro events this week:
- USD Inflation Rate YoY 8:30 pm EST Tuesday
- USD Core Inflation Rate YoY 8:30 am EST Tuesday
- CPI 8:30am EST Tuesday
- PPI MoM 8:30am EST Wednesday
BTC/USDT 1W
Despite Tuesday’s 5.07% sell-off in BTC, the price recovered substantially after a rejection of the $19k support. The 10% gain BTC posted on Friday is the largest daily increase since late February.
Looking at the weekly chart shows BTC is not out of the woods. A test of the downtrend resistance (red) and $25k resistance seems likely in the next few weeks. Rejections of these resistance levels could push the BTC price down to retest the $19k support level (pink). BTC completed the weekly candle up +8.71% to $21,1625.
High-resolution chart
ETH/USDT 1W
With the Merge a mere 2-3 days away, Ether’s price has showcased two solid weeks of 20% combined gains. With all the hype and momentum surrounding the event, ETH looks probable to reach the $1,920 resistance level (pink), which lines up with the downward trend resistance (red). ETH would have to break through these key levels to end the downtrend that began in November 2021. ETH closed the weekly candle up 10.70% to $1,750.
High-resolution chart
| US markets close | Gain/Loss |
| S&P 500 | *market closed weekend |
| Nasdaq | |
| Dow | |
| VIX |
Notable Gainers (24h):
| Protocol (Coin) | Price ($) | Gain (%) |
| Terra (LUNA) | 5.54 | +199 |
| Ravencoin (RVN) | 0.051 | +78 |
| TerraClassicUSD (USTC) | 0.05 | +62 |
| Terra Luna Classic (LUNC) | 0.00041 | +59 |
| Rocket Pool (RPL) | 34.22 | +45 |
| Helium (HNT) | 5.15 | +24 |
| Cosmos Hub (ATOM) | 15.58 | +24 |
| ApeCoin (APE) | 5.66 | +19 |
| Ethereum Classic (ETC) | 38.39 | +19 |
| Voyager VGX (VGX) | 0.91 | +70 |
| Polymath (POLY) | 0.27 | +46 |
| Bitcoin Fear and Greed Index | 26 Fear |
| “Crypto” Google Trends 90d | 40 |
| “Bitcoin” Google Trends 90d | 30 |
Newswatch 📰
Vitalik makes a surprise visit to Ukraine. Ethereum co-founder Vitalik Buterin made a surprise appearance at the Kyiv Tech Summit on Saturday to show support for Ukraine. The three-day tech event included Ukraine’s Digital Transformation Minister for IT Development, 30 tech experts, and an estimated 500 hackers that focused on improving digital technology for the war effort.
$500m more. Microstrategy filed a sales agreement with the SEC to sell $500m of their stock to Cowen and Company LLC to purchase additional bitcoin. The firm currently holds 129,699 BTC worth $3.977 billion, with an aggregated loss of $1 billion.
SEC plans crypto office to address growing filings. The Securities Exchange Commission (SEC) is looking to create a new office for handling crypto-related filings. The new office will be named the “Office of Crypto Filings.”
News tidbits:
- Curve Finance and Frax Finance are now using Llamapay.
- Dopex introduces Bridgoors Bonding Program.
- Kujira: What to expect when USK launches.
NFT & metaverse update 🐵
- Asian Banking Giant DBS to purchase digital land in The Sandbox.
Banter’s take
Are you prepared for a hectic week?
The Core Inflation Rate and the PPI data are scheduled to be released this week. As the markets remain dependent on macro, the release could hold the utmost importance for direction. Moreover, the Federal Reserve (FED) will also be closely monitoring the results for guidance pertaining to rate hikes.
Oh, and let’s not forget about the Merge. According to Google, there are less than three days until this major crypto event. So yes, even Google has added a nifty countdown to the Merge. Pretty sweet.
Source: Google.com
Needless to say, the market will be experiencing some turbulence. So strap in, keep your tray tables up, and be prepared for anything!
Gabri
Follow me on Twitter for daily updates!
Disclaimer
Good Morning crypto (issued by Crypto Banter) is a newsletter for entertainment purposes only.
All opinions expressed by the publisher, writers, and chartists should not be construed as financial advice and do not necessarily reflect the views of Crypto Banter. The publisher, writers, and chartists may hold positions in the tokens and assets discussed. Readers are encouraged to do their own research.
