Did Bitcoin Get Caught Up in Hype Surrounding The Merge?
In mid-September, bitcoin – the world’s number one digital currency by market cap – ran above the $22,000 mark for the first time in nearly a month.
Bitcoin Experienced a Small Surge in Mid-September
Everyone was praising the move given the asset had recently hit a price below $19,000, something it hadn’t done since June of this year. This means that after hitting a near-three-month low, the world’s primary digital asset seemingly shot up by close to $4,000, marking what many analysts consider a relatively big jump.
While everyone was breaking out the champagne, not all the traders and industry experts out there think the signs are there for bitcoin’s newfound strength to stay active. They think the currency could wind up experiencing more major dips, and thus things could remain in the doldrums before they show true signs of recovery.
Martin Hiesboeck – head of blockchain and crypto research at Uphold – explained in a recent interview:
The geopolitical situation is dominating the conversation. Continued war means continued inflation. At the same time, we have a situation we have never had before: almost full employment, [an] expanding economy, yet unprecedented price hikes.
One of the big things that could have caused the bitcoin price to spike the way it did was the Merge undergone by the Ethereum network. Ethereum is the second largest digital currency by market cap and the number one competitor to bitcoin. The asset, for the last several years, has operated on a proof of work (PoW) module like BTC has, though The Merge ultimately saw the currency switching over to proof of stake (PoS).
This meant the currency was going to rely purely on staking and people holding their assets, and mining would no longer be part of the equation. This also meant that Ethereum was going to experience boosts in transaction speeds, gas fees would be less, and the price of the currency would surge.
It appears bitcoin itself got caught up in the hype and seemingly rose along with it. Edward Moya – senior market analyst at Oanda – explained:
The retail trader is starting to panic again as meme stocks and cryptos fall under pressure… If the mood remains that it will be a bad September swoon on Wall Street, a retest of the summer lows seems inevitable.
Could It Fall to $10K?
Wendy O – a crypto expert and market analyst – recently stated bitcoin could fall to $10K before the end of the crypto winter is nigh. She said:
Are we going to be able to do that? I don’t know yet, but one thing I am noticing with bitcoin is that we kissed $24,800 [on July 30] and we had a couple of attempts to sustain and flip above, but we were unable to do so. We might get a little bit of a retest but then continue to go upward.
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