The Most Important Week for Ethereum Merge Test

Ethereum, Merge Analysis and Talking Points

• Important Week For Merge Launch
• Is Merge Another Buy the Rumour, Sell the Fact?

A Guide to Day Trading Bitcoin & Other Cryptocurrencies

Important Week For Merge Launch

A big week in the crypto space and more specifically Ethereum. As Ethereum bulls gear up for Merge, arguably the most anticipated event for the cryptocurrency this year, the merge of its third and final test network environment, Goerili is expected to take place this week. Should the test be a success, this will essentially confirm a Merge launch date for September 19-20.

For more details on Ethereum 2.0, find out in our explainer. Ethereum 2.0: Switching to Proof-of-Stake (PoS)

As we head towards this final Merge test, Ethereum is back above key resistance at 1700 to test recent highs. What’s more, the cryptocurrency has also outperformed Bitcoin in recent weeks. In the event that the test is successful, Ethereum can be expected to trend higher heading into the Merge launch date, with a move towards the 200DMA (2270), while Ethereum will likely continue its outperformance over Bitcoin, given that Merge is not entirely priced into Ethereum at present.

Ethereum Chart: Daily Time Frame

Source: Refinitiv

Is Merge Another Buy the Rumour, Sell the Fact?

That being said, given the anticipation around Merge, I would expect it to be another “buy the rumour, sell the fact”. While I don’t deny that Merge will have significant positives for Ethereum. Over its short lifespan, market psychology has been evident in the crypto space as we have seen time and time again that hyped events have often resulted in cryptos rallying into the event and selling off shortly after launch. The charts below highlight this. In turn, with this in mind, the best time to have exposure would be when heading into the Merge launch date. Although, it would be worthwhile reducing exposure perhaps the day before or the day of launch.

Source: Refinitiv