What’s next for Bitcoin and the crypto market now that the Ethereum Merge is over?

The Ethereum merger came and went, leaving investors to ponder what the next trending development in the market might look like. In a Cointelegraph Twitter space with Capriole founder Charles Edwards, the analyst mentioned that excitement over Ethereum’s merger and its bullish price action had kept the market somewhat hopeful. Now that the event has come and gone, the crypto market has been selling off, with the price of Bitcoin (BTC) trading below $20,000 and Ether (ETH) below $1,500.

Eventually, new market narratives and trends will emerge, and if the fundamentals are right, traders will rotate funds as these new leaders emerge.

Let’s take a look at some potential trends.

Where will the former ETH miners go?

The Ethereum network successfully transitioned to a proof-of-stake (PoS) model, meaning miners are out of pocket, but possibly still have their GPU and ASIC mining infrastructure. Some miners may choose to mine on a different chain instead of selling their rig.

While they haven’t decided on any particular chain yet, Ravencoin, Flux, Ethereum Classic, and Ergo seem to be the favorites. Since the merger, each network has seen its hashrate rise to new all-time highs, as shown below.

Hashrate ETC. Source: 2Miners
Hashrate ERG. Source: 2Miners
RVN hashrate. Source: 2Miners
Hashrate FLOW. Source: 2Miners

Prices for each altcoin also rose over the past month, with Ravencoin’s RVN up 169%, Ergo’s ERG adding 132%, Flux gaining 156%, and Ethereum Classic’s ETC increase by 135% in the last 90 days.

Interestingly, the hashrate and price dropped sharply on September 15th, and at the time of this writing, Flux and RVN only seem to be recovering. Over the coming weeks and months, it will be interesting to see which network miners may choose as their new home and the impact this has on the price of the cryptocurrency.

The Cosmos continues to expand

The Cosmos ecosystem continues to expand, which seems to be attracting buyers to ATOM. Since bottoming out at $5.50 on June 18, ATOM’s price has gained 137.5% and is currently trading above $16. The analysis suggests that investors see the soon-to-be-launched liquid bet, ATOM being used as collateral for the minting of stablecoins, the launch of Cosmos Hub 2.0, and the eventual recovery of decentralized finance in general as to long-term bullish factors for the ATOM price.

Buy the rumor and sell the news, or buy the dip?

While ETH’s current price action is less bullish than Merge supporters and ETH bulls might have hoped, the actual shift to PoS appears to have been successful, and perhaps over time, the PoS profits will translate into bullish ETH price action. According to Jarvis Labs co-founder Ben Lilly, the “Joe Cool fashion” for ETH investors is not “to be stuck in the next few days. The main player that is likely to do any kind of crazy activity is the miner. And this is a one-off event that will be short-lived.”

Lilly explained that:

“Joe Cool’s move is to sit there and buy into any kind of over-emotional move. So sit back and take it easy.”

In the future, Ether could experience a supply shock and possibly become deflationary. Staking further secures the network while offering guaranteed returns on deposited assets. In a market that is stuck in a downtrend, getting a safe and predictable return could be more attractive.

Essentially, Lilly suggests that it will take time for the fervor surrounding the merger to settle and for investors to begin capitalizing on the benefits that the Ethereum PoS network could offer.

What about Bitcoin?

In this week’s Bitcoin analysis I talked about how not much has changed with the price of Bitcoin. Its price has remained range-bound between $17,600 and $24,400 over the past three months, and all rallies at each range high since March 29 have been capped by the 200-day moving average and a general resistance trendline extending from Bitcoin’s. November 2021 all-time high at $69,400.

BTC/USDT 1 day chart. Source: TradingView

While continued consolidation within the current range could (and usually would) be good for altcoins, macro tensions may continue to weigh on crypto and equity markets. The September 12 consumer price index print could lead to more aggressive rate hikes by the US Federal Reserve, and the potential knock-on effect on stock prices could have an even more pronounced spillover effect about crypto prices.

For this reason, investors remain largely risk-averse for most cryptocurrencies, and it is possible that repeated rejection, a long-term downtrend line, and a retest of the $19,000 support could eventually cause a break below the annual low.

This newsletter was written by Big Smokey, author of The Humble Pontificator Substack and resident author of the Cointelegraph newsletter. Every Friday, Big Smokey will write market insights, trend guidance, analysis and early research on potential emerging trends within the crypto market.

Exemption from liability. Cointelegraph does not endorse any product content on this page. While our goal is to provide you with all the important information we could obtain, readers should do their own research before taking any action related to the company and take full responsibility for their decisions, or this article it can be considered as investment advice.