Ethereum price

Will the Ethereum Merge crash or revive the crypto market? | Find out now on The Market Report

On this week’s episode of “The Market Report,” Cointelegraph’s resident experts discuss the Ethereum (ETH) merge and how it might impact the crypto market.

On this week’s “The Market Report” show, Cointelegraph’s resident experts discuss the Ethereum Merge and how it might impact the crypto market

To kick things off, we broke down the latest news in the markets this week.

Surge or purge? Why the Merge may not save Ether (ETH) price from “Septembear.” Options data, macroeconomic catalysts and technical signals suggest a decline in Ether price is on the table despite the Merge. Ethereum’s native token, Ether, is not immune to downside risk in September after rallying approximately 90% from its bottom of around $880 in June. Can Ethereum prove analysts wrong and break out in price following the Merge or has the price already been factored in and we’ve already seen the price spike for the end of this year?

ETH Merge: CoinGecko co-founder shares strategy for forked tokens. Many believe that after Ethereum transitions to proof-of-stake (PoS), a faction of Ether (ETH) miners will be creating a proof-of-work (PoW) fork of the network so that they can still keep mining. An executive believes that there are ways for ETH holders to take advantage of this upcoming event. Different people are expecting to trade the Merge very differently to take advantage. Our experts highlight some of their plans. Let us know how you will be doing things in the comments sections.

Ethereum gone wrong? Here are 3 signs to keep an eye on during the Merge. The assumption that Ethereum will just transition to a fully functional proof-of-stake (PoS) network after the Merge somewhat ignores the risk and effort necessary to move an asset that has a $193 billion market capitalization and 400 decentralized applications (DApps). That is precisely why monitoring vital network conditions is essential for anyone willing to trade the event. Our very own Marcel Pechman lays down 3 things to keep an eye on during the merge.

Next up is a new segment called “Quick Crypto Tips,” which aims to give newcomers to the crypto industry quick and easy tips to get the most out of their experience. This week’s tip: Learn when to step aside.

Market expert Marcel Pechman then carefully examines the Bitcoin and Ether (ETH) markets. Are the current market conditions bullish or bearish? What is the outlook for the next few months? Pechman is here to break it down. The experts also go over some markets news to bring you up to date on the latest regarding the top two cryptocurrencies.

Lastly, we’ve got insights from Cointelegraph Markets Pro, a platform for crypto traders who want to stay one step ahead of the market. The analysts use Cointelegraph Markets Pro to identify two altcoins that stood out this week: Lido DAO Token’s LDO and Firo’s FIRO.

Do you have a question about a coin or topic not covered here? Don’t worry. Join the YouTube chat room, and write your questions there. The person with the most interesting comment or question will be given a one-month subscription to Markets Pro worth $100.

The Market Report streams live every Tuesday at 12:00 pm ET (4:00 pm UTC), so be sure to head on over to Cointelegraph’s YouTube page and smash those like and subscribe buttons for all our future videos and updates.

3 ways to trade Bitcoin and altcoins during a bear market

Everyone’s a genius during a bull market, but how should one trade in a bear market?

Markets are scary right now, and while the situation is likely to worsen, it doesn’t mean investors need to sit out and watch from the sidelines. In fact, history has proven that one of the best times to buy Bitcoin (BTC) is when no one is talking about Bitcoin.

Remember the 2018–2020 crypto winter? I do. Hardly anyone, including mainstream media, was talking about crypto in a positive or negative way. It was during this time of prolonged downtrend and lengthy sideways chop that smart investors were accumulating in preparation for the next bull trend.

Of course, nobody knew “when” this parabolic advance would take place, but the example is purely meant to illustrate that crypto might be in a crab market, but there are still great strategies for investing in Bitcoin.

Let’s take a look at three.

Accumulation via dollar-cost averaging

It’s helpful to be price agnostic when it comes to investing in assets over the long term. A price agnostic investor is immune to fluctuations in value and will identify a few assets that they believe in and continue to add to the positions. If the project has good fundamentals, a strong, active use case and a healthy network, it makes more sense to just dollar-cost average (DCA) into a position.

Take, for example, this chart from DCA.BTC.

Results of weekly dollar cost averaging into Bitcoin. Source: DCA.BTC

Investors who auto-purchased $50 in BTC weekly over a two-year span are still in profit today, and by DCA, there is no need to make trades, watch charts or subject oneself to the emotional stress that is associated with trading.

Trade the trend and go long off extreme lows

Aside from steady, reasonably sized dollar-cost averaging, investors should be building a war chest of dry powder and just sitting on their hands waiting for generational buying opportunities. Entering the market when it’s deeply oversold and all metrics are in extreme is typically a good place to open spot longs but with less than 20% of one’s dry powder.

When assets and price indicators are two or more standard deviations away from the norm, it’s time to start looking around. Some traders zoom out to a three-day or weekly time frame to see when assets correct to higher time frame support levels or previous all-time highs as a sign to invest.

200-week moving average heatmap for Bitcoin. Source: LookIntoBitcoin

Others look for price to flip key moving averages like the 118 DMA, 200 WMA and 200 DMA back to support. On-chain fanatics typically follow the Puell Multiple, MVRV Score, Bitcoin Pi indicator or Realized Price indicator to see when extreme multi-year lows are hit as a sign of when to buy.

Either way, opening spot longs during extreme sell-offs usually turns out to be a good swing trade or even entry point for a multi-year-long position.

Related: Wen moon? Probably not soon: Why Bitcoin traders should make friends with the trend

Do nothing, until the trend changes

Trading during a bear market is hard, and capital and portfolio preservation are the top priorities. For this reason, it’s best for some investors to just wait for confirmation of a trend change. As the saying goes, “the trend is your friend.” Everyone is a genius and a superb trader during a bull market, so if that was you, then wait for the next bull trend to roll around and go be a happy-go-lucky genius then.

Downtrends, consolidation and bear markets are notorious for chopping up traders and reducing one’s portfolio size, so it’s unwise to trade against the trend unless one has a PNL positive method for trading during bear trends and some skill at shorting.

For crypto investors, it’s important not to live in a vacuum and keep an eye on the equities markets. Crypto traders have a tendency to only focus on crypto markets, and this is a mistake because equities markets and BTC and Ether (ETH) prices have shown a strong correlation in the past two years. In one’s charting suite of choice, it would be wise to keep the S&P 500, Dow Jones or Nasdaq charts up alongside BTC’s or ETH’s daily chart.

Bitcoin correlation to equities markets. Source: TheBlock

In the most recent trend reversal, BTC’s price action was the canary in the coal mine that began to chirp louder and louder as the United States Federal Reserve amplified its intent to raise interest rates. It is easy to be misled by the minuscule moves that occur in Bitcoin’s four-hour and daily price charts, and one could easily be lured into some hefty positions based on the belief that BTC is on the verge of a reversal.

Keeping an eye on the market structure and price action of the largest equities indexes will provide crucial insight into the strength and duration of any bullish or bearish trend that Bitcoin might exhibit.

This newsletter was written by Big Smokey, the author of The Humble Pontificator Substack and resident newsletter author at Cointelegraph. Each Friday, Big Smokey will write market insights, trending how-tos, analyses and early-bird research on potential emerging trends within the crypto market.

Disclaimer. Cointelegraph does not endorse any content of product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.

Ethereum miner balance reaches four-year high weeks before the Merge

Experts believe that miners are hoarding more ETH in anticipation of price surges and forked PoW tokens.

The Ethereum Merge is slated for Sept. 15, which will see the Ethereum blockchain move from its current proof-of-work (PoW) mining consensus to proof-of-stake (PoS).

The Merge is being touted as one of the biggest upgrades for the Ethereum blockchain as it would help the network move to a more energy-efficient way of verifying transactions and eliminate PoW mining completely. With the Merge date approaching, Ether (ETH) miner’s balance has touched a new four-year high.

According to Oklink data, the balance of Ethereum miner addresses exceeded 260,000 ETH with a total of 261,848 ETH valued at over $415 million at the current price. Miner accumulation reached a new four-year high with similar levels seen last in April 2018.

ETH Miner Address Balance Source: Oklink

The miners’ growing accumulation of ETH has been attributed to a few factors, the first being the anticipation of a price surge in the wake of the key upgrade. While many pundits have called the Merge a “buy the rumor and sell the news” kind of event, the miners’ accumulation indicates a growing bullish sentiment.

Another major factor is the hard fork. The majority of ETH miners are in favor of a hard fork to keep the PoW chain alive and continue mining. Thus, in the case of a hard fork, these miners holding onto ETH would also receive an airdrop of the forked token. While the value of the forked token might not appreciate in tune with the main ETH chain, however, it would still ensure additional capital.

A forked PoW token has got the backing of a few leading crypto exchanges like Bitfinex while the likes of Binance have said that if the demand for the forked token were big enough, they would not mind listing it.

Related: Top 5 misconceptions about the anticipated Ethereum upgrade

Yohannes Christian, Research Analyst at leading crypto exchange Bitrue, told Cointelegraph:

”The “Difficulty Bomb” will make mining unprofitable after the Merge. Before this happens, miners are exploring all avenues to cart away with as many Ether as they can while they still have the time.“

“As such, more computing resources are being committed to the mining of Ethereum and this accounts for what has translated to a very high miner balance,“ he added.

The Merge has created a dilemma of sorts for the miners as the move would eliminate PoW mining completely, but keeping the PoW chain alive via a hard fork won’t guarantee an appreciation in price with the majority of the community already supporting the main PoS chain.

These 3 altcoins have completely ignored the bear market in the last 90 days

Several altcoins have not only outperformed Bitcoin and Ethereum in the last three months but have also posted impressive gains.

The cryptocurrency market overall endured a bad summer on back-to-back pieces of bad news, ranging from Terra’s (Luna) —now renamed Terra Classic (LUNC) — collapse to the Celsius Network’s liquidity crisis. But some tokens have bucked the downtrend and have actually seen their valuations go up over the summer.

Specifically, the last 90 days have seen these so-called alternative cryptocurrencies, or “altcoins,” outperforming top coins like Bitcoin (BTC) and Ether (ETH). Here are three among them:

Chiliz (CHZ)

Chiliz’s (CHZ) return in the last 90 days comes to be above 80%, the highest among the top-cap cryptocurrencies. Moreover, CHZ is down only 26% year-to-date compared with BTC and ETH losing 57% and 60%, respectively. 

Cryptocurrency performance (last 90 days). Source: blockchaincenter.net

On the daily chart, CHZ’s price reached $0.20 per piece on Aug. 29, and was looking to close the month in profit. Conversely, from a technical perspective, the Chiliz token stares at a potential 55% correction to $0.09 in September, based on the setup shown below.

CHZ/USD three-day price chart. Source: TradingView

Originally, the CHZ price rally started amid a rebound witnessed across the crypto market. But ts upside move picked momentum on a flurry of optimistic updates, including a partnership with crypto exchange Huobi Global and a nearly 25% acquisition of FC Barcelona’s Barça Studios.

Chiliz also benefited from the hype around its back-to-back network updates as it attempts to do away with Ethereum and launch its own chain CHZ 2.0.

Lido DAO (LDO)

Lido DAO (LDO) has rallied around 60% in the last 90 days primarily due to the euphoria around “the Merge,” Ethereum’s long-awaited network transition from proof-of-work to proof-of-stake in September.

Related: US dollar hits new 20-year high — 5 things to know in Bitcoin this week

Lido DAO helps underfunded users to become stakers on Ethereum’s upcoming proof-of-stake chain. It does so by collecting users’ Ether funds into a pool of 32 ETH—as required by the Ethereum network—and depositing them into the Merge’s official smart contract.

Ethereum 2.0 TVL staked by provider as of Aug. 28. Source: Glassnode

The prospects of Lido DAO attracting more users in the days leading to and after the Merge have triggered buying in an otherwise bear market.

But like Chiliz, LDO’s price risks plunging lower by 20% to $1.31 in September as shown in the setup below.

CHZ/USD daily price chart. Source: TradingView

The $1.31-target serves as the support in the consolidation area marked in red, given its historical performance.

Quant Network (QNT)

Quant Network (QNT) rose by more than 40% in the last 90 days, initially driven higher by a broader crypto market uptrend but picking momentum on speculations that their interoperable blockchain protocol would find adoption across governmental and regulatory bodies.

But from a technical perspective, QNT risks a 40% price decline from its current price level owing to the formation of a head-and-shoulders setup on its daily chart with a $57 target by September, as shown below.

QNT/USD daily price chart. Source: TradingView

Other winners

Ethereum Classic (ETC) has also surged by more than 40% in the last 90 days in hopes that it would offer a safe haven for Ethereum miners after the PoS upgrade.

WhilPolygon (MATIC) has rallied by 27% in the same period, followed by Uniswap (UNI), which is up 13%.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Ethereum dev addresses node centralization concerns in runup to the Merge

A majority of 4,653 active Ethereum nodes are being run through centralized web providers like Amazon Web Services, which experts believe could become a central point of failure.

Ethereum is a few weeks away from officially moving to a proof-of-stake (PoS) mining consensus from its current proof-of-work (PoW) one. The transition, officially dubbed the Merge, is slated for Sept. 15, but in the run-up to the major upgrade, Ethereum node centralization has become a hot topic.

As Cointelegraph reported last week, the majority of 4,653 active Ethereum nodes are being run through centralized web providers like Amazon Web Services (AWS), which experts believe could expose the Ethereum blockchain to the central point of failure post Merge.

Distribution of Ethereum nodes from web service providers. Source: Ethernodes

The same concern was put forward by Maggie Love, co-founder of Web3 infrastructure firm W3BCloud. She claimed that the centralization of nodes in the Ethereum PoS network could become a big concern that nobody seems to be focusing on.

Ethereum lead developer Péter Szilágyi addressed the mounting centralization concerns and claimed that they have been aiming to prune the database since Devcon IV. Pruning refers to reducing the size of the blockchain to a point where developers can create a reliable registry with a certain size.

Szilágyi added that the idea received heavy backlash at the time and the current centralization in nodes is a direct result of that. He explained that the Ethereum state needs to be a constant size for people to be able to run their own nodes.

Related: ETH whales move holdings onto exchanges before Merge

Ethereum state refers to a large data structure that holds not only all accounts and balances but a machine state, which can change from block to block according to a pre-defined set of rules. Szilágyi explained:

“Ethereum state needs to be ‘constant‘ in size. That way it can run forever. The constant can be pushed up like the block gas limit if need be, but it mustn’t grow unbounded. Until that’s solved, there’s no light at the end of the tunnel.”

He noted that active efforts are being made by several parties to resolve the issue, however, in the meantime, the common public shouldn’t be blamed for “not wanting to maintain an ever larger ‘infrastructure’ for running a node.”

At present, the cost of running an individual node is very high, something that crypto analytic firm Mesari flagged in its report. Due to such infrastructure costs, people often turn to cloud infrastructure service providers such as AWS. However, high centralization could prove to be a vulnerability in the long term.

ETH whales move holdings onto exchanges before Merge

The top 10 Ethereum non-exchange addresses have seen an 11% decline in their holdings over the past three months, while on-exchange whale addresses have seen a 78% increase.

The Ethereum blockchain is slated for one of the most significant updates since its inception as it transitions from its current proof-of-work mining consensus to a proof-of-stake (PoS) one. 

The Merge date is scheduled for Sept. 15, after the successful Goerli testnet integration — the final testnet merger before the actual transition. Ether (ETH), Ethereum’s native token, saw a bullish surge in July after the announcement of the Merge date, with its price rising to a new six-month high of over $2,000 but failing to consolidate at the critical resistance.

The bullish enthusiasm in terms of token price and market sentiment seems to be on a decline as the Merge nears. There has been a sharp decline in the holdings of a significant number of ETH whales.

Data from crypto analytics firm Santiment indicates that the gap between Ethereum’s top 10 largest non-exchange addresses and exchange addresses is closing. Over the past three months, top whale addresses have sent a significant amount of ETH onto exchanges. Non-exchange addresses have declined 11%, while exchange-based addresses have surged by 78%.

Ethereum’s top 10 exchange and non-exchange wallets. Source: Santiment

The flow of crypto onto exchanges generally reflects bearish sentiment and is often done by traders to take a profit by selling their tokens, possibly indicating that whales expect the price to go lower in the near future.

Many market analysts also believe the Merge will be a “buy the rumor, sell the news” event. The saying means that if good news is expected sometime in the future, the price will often move higher in anticipation of that date, but not necessarily after. The market rallied in the aftermath of the Merge date confirmation, but it could eventually see a price decline after the key event.

The Merge will mark the completion of the second of three phases in Ethereum’s transition to PoS. The process began in December 2020 with the launch of the Beacon Chain.

Related: Monthly Ethereum options data suggests $2K will remain an elusive target

The current phase was scheduled to be completed by mid-2021. However, due to several delays, it is now slated for the third quarter of 2022. The third phase will be the most crucial, as it will introduce several scalability features such as sharding and significantly reduce the blockchain’s energy consumption.

The Sept. 15 event is a significant milestone for Ethereum, but the Merge only means a change of mining consensus. Key benefits such as high transaction capacity, lower gas fees and a reduction in energy consumption will come after the completion of the third phase.

A bullish Bitcoin trend reversal is a far-fetched idea, but this metric is screaming ‘buy’

Non crypto-related factors continue to weigh on BTC price, but a key on-chain metric that called previous market bottoms suggests Bitcoin is severely undervalued.

Bitcoin (BTC) price remains pinned below $22,000 as the lingering impact of the Aug. 19 sell-off at $25,200 continues to be felt across the market. 

According to analysts from on-chain monitoring resource Glassnode, BTC’s tap at the $25,000 level was followed by “distribution” as profit-takers and short-term holders sold as price encountered a trendline resistance following a 23-consecutive-day uptrend that saw BTC trading above it’s realized price ($21,700).

Bitcoin total inflows and outflows to all exchanges (USD). Source: glassnode

The firm also noted that the “total inflows and outflows to all exchanges” metric shows exchange flows at multi-year lows and back to “late-2020 levels,” which reflects a “general lack of speculative interest.”

From a higher-time frame perspective, Bitcoin’s current price action is simply a continuation of its near three-month-long chop in the $18,500 to $22,000 range, but the real damper on sentiment is persistent non-crypto-related concerns in the United States and global economy.

On August 25, the Jackson Hole Economic Symposium begins and from this, the public will learn more about the Federal Reserve’s perspective on the U.S. economy, its plans for future interest rate hikes, whether the inflation target remains at 2% and if the Fed thinks the U.S and global economy are in a recession. Anticipation over the symposium has clearly made investors skittish and these frayed nerves are visible in the S&P 500, DJI and crypto markets this week.

According to Serhii Zhdanov, CEO of EXMO cryptocurrency exchange:

“It appears there is no single driver for the recent decline. The global crises continue, and it is not certain where the bottom is. Inflation is forcing people to get rid of their investments to get cash to cover daily expenses. In many countries the total amount of credit card debt is breaking to new record highs. Recent data shows that Covid isn’t gone and geopolitical tension further adds fuel to global markets’ decline.”

Ether marches to the beat of its own drum

Ether (ETH), on the other hand, appears to be showing some upside promise from a technical analysis point of view. Last week, the asset corrected alongside BTC and endured a few blows related to centralization fears after the Office of Foreign Assets Control, or OFAC, sanctioned Tornado Cash and the crypto community grew fearful over potential outcomes of the proof-of-stake transition making the network (and its largest ETH stakers) susceptible to censorship and regulation.

ETH/USDT daily chart. Source: TradingView

Generally, the bullish “merge” narrative remains in play and the large cup and handle pattern seen on Ether’s daily timeframe, plus the bounce off the $1,500 level are enough to support traders’ dreams of ETH price rising into the $2,500 to $2,900 range.

Ether looks similarly juicy in its ETH/BTC pair, which bounced off support in the 0.073 BTC range.

MVRV on-chain data points to undervalued Bitcoin

As @big_smokey1 mentioned “stocks and crypto [are] clearly risk off” with Jackson Hole upcoming and in terms of price action, this is likely to manifest as continued resistance at Bitcoin’s long-term descending trendline until a sufficient catalyst to provoke a trend change emerges.

Related: What crashed the crypto relief rally? Find out now on The Market Report

For the time being, Bitcoin’s short-term price prospects are less than optimistic, but Jarvis Labs resident analyst “JJ” pinpointed a key on-chain metric that suggests BTC is trading in a generational buy zone.

Price versus MVRV difference for BTC. Source: Jarvis Labs

According to JJ, Bitcoin’s MVRV (Market Capitalization versus Realized Capitalization) indicator is printing a reading that is “extremely low.”

Does this mean that investors should go out and put every last penny into BTC? Probably not, but as the MVRV chart above shows, dollar cost averaging into BTC when its on-chain and technical metrics hit extreme lows has proven to be a profitable strategy in the last three bull markets.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

Crypto market bloodbath leads to over $500M in liquidations in 24 hours

Data from crypto analytics firm Glassnode shows Bitcoin futures long liquidations touching a new eight-month high as BTC price crashed below $22,000 on Friday.

The crypto market registered a major slump on Friday, resulting in major cryptocurrencies losing key support and falling to new monthly lows after a prolonged bullish surge over the past month.

Bitcoin (BTC), which was looking to break through the $25,000 resistance level last week, fell below $22,000 to register a new two-week low of $21,747. Ether (ETH), the second-largest cryptocurrency, had surged past $2,000 in the run to the Merge but has slumped by 6% over the past 24 hours to register a new weekly low of $1,726.

After weeks of bullish momentum, the flash crash also saw 157,098 traders get liquidated in the past 24 hours, resulting in total liquidations of over $551 million. Data from Coinglass indicates that Bitcoin traders lost over $203 million, followed by Ether traders at $140 million.

The following chart shows that the number of liquidated long positions outnumber the short ones by a significant margin, indicating that market sentiment was highly bullish until the flash crash. The value of short positions liquidated was only $41 million against $398 million in long positions.

Total liquidations. Source: Coinglass

BTC futures long liquidations reached an eight-month high of $84,934,697.05 on OKX, breaking the previous high of $48,630,183.66 observed on May 5.

Bitcoin futures contracts long liquidations on OKX (formerly known as OKEx). Source: Glassnode

The sudden plunge in the crypto market is being attributed to the United States Federal Reserve’s expected interest rate hike in September. August consumer price index data came out as lower than expected, leading to a bullish surge in crypto and foreign exchange markets alike.

Related: Bitcoin ‘very bearish’ below $22.5K, says trader as BTC price dives 6%

Federal Reserve Bank of St. Louis President James Bullard said he would favor an increase of 75 basis points. An interest rate hike by the Fed next month could lead to another downturn. A similar interest rate hike of 75 basis points in June led to crypto market turmoil after an initial price surge.

3 strategies investors might use to trade the upcoming Ethereum Merge

Investors have been crafting their strategies for navigating the volatility that could arise as the Ethereum Merge takes place. Here are a few to consider.

The Ethereum network’s long-awaited transition from proof-of-work to proof-of-stake is set to occur from Sept 15 to 16 and for the last year, traders and analysts have been discussing various outcomes for the upgrade and possible trading strategies. 

Let’s take a look at three options investors and traders have.

Hodl ETH to earn the expected “hardfork” token

The first strategy is relatively simple. Traders can simply buy Ether (ETH) in the spot market and hold it in their exchange wallet, or whatever platform/wallet will support forked tokens, and wait for the expected PoW token.

Way back in 2017, when Bitcoin was forked to Bitcoin Cash, BTC holders received an equal amount of BCH, which at one point traded for $1,650 per token. At the height of the 2021 bull market, BCH rallied as high as $800.

If PoW tokens from those entities that choose to ignore the Merge happens, then finding exchanges that support the hard forks would be the place to sell them. Don’t forget to pay your taxes if your country obligates you to do so.

There’s also a possibility that ETH PoW tokens won’t immediately pump and dump. Many analysts are sounding off about the risk of centralization to a PoS Ethereum network, and while it may sound far-fetched, a miner-led PoW ETH fork could gain ground, assuming projects and developers are willing to build DApps on the blockchain.

Related: Economic design changes will affect ETH’s value post-Merge, says ConsenSys exec

Long ETH, short futures

Let’s say you’re a tad bit skeptical about whether Ethereum will successfully pull off the Merge. A lot of people are. And after this hellacious year where Bitcoin (BTC) lost all of its yearly gains, Wonderland Money collapsed and Terra (LUNA) —now Terra Classic (LUNC), Celsius and Three Arrows Capital rugged everyone, it’s perfectly natural to be nervous about a fundamental change in the market’s second largest asset.

Hedging is the option for investors who feel 50/50 about the Merge. Basically, one would be long Ether, which many holders naturally are and have been for years, or at least from the recent $880 “bottom.”

While long Ether, holding a short position in futures or options contracts allows one to protect against losses if ETH corrects sharply and hopefully obtain the PoW hard fork tokens, which should further cancel out losses on the spot position.

The hope of making up some of those “losses” from gaining the unconfirmed PoW tokens could help skittish Merge traders sleep better at night and perhaps wrap things up in profit.

Stay in stablecoins and just trade the trend

For some investors, the risk of attempting to trade the Merge outweighs the reward and obtaining the “free” PoW hardfork tokens might not be a priority.

These investors might consider just staying in stablecoins and trading direction, or the strongest trend presented by Ether. In this scenario, one would either trade daily breakouts and breakdowns or whichever way the short-term trend dictates. Many traders anticipate the Merge to be a buy the rumor, sell the news-type event and others expect the price to dump considerably after the Merge is complete.

If this is your perspective, then crafting and executing a strategy around this anticipated volatility is relatively simple if one is sitting in stables. These traders could then purchase post-dip ETH if they’re true believers and if the various PoW tokens put up heavy volumes on exchanges, the price swings in hardfork tokens could also be played.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.

EthereumPoW team plans to freeze selected contracts, community pushes back

A PoW hard fork of Ethereum is being propagated by a set of miners, but many experts believe that the chances of it succeeding are very low.

Ethereum is all set to transition to a proof-of-stake (PoS) network by Sept. 15 to 16, which will see the end of its current proof-of-work (PoW) consensus mechani and eliminate mining from the ecosystem.

In light of such a significant upgrade, Ethereum’s PoW proponents, especially its miners, have decided to keep the PoW chain alive. EthereumPoW, comprising the core PoW team, has recommended that Ether (ETH) holders withdraw their assets from liquidity pools (LPs) at places such as Uniswap, SushiSwap, Aave, Compound and other decentralized exchanges (DEXs).

The core team said they would temporarily freeze EthereumPoW (ETHW) tokens in certain liquidy pools of DEXs and lending protocols to protect user assets after the hard fork.

The core team believes that immediately after the Ethereum PoW hard fork, especially for the first several blocks, users’ ETHW tokens deposited in liquidity pools will be swapped or lent out by hackers and scientists using deprecated and valueless Tether (USDT), USD Coin (USDC) and Wrapped Bitcoin (WBTC), which would “create a huge mess to the whole network and community.”

The core team said:

“ETHW Core has to make the hard decision to temporarily freeze certain LP contracts to protect users’ ETHW tokens until the protocols’ controllers or communities find a better way.”

The team also said freezing would not be applied to the staking contracts that only involve a single asset, such as the Ethereum 2.0 deposit contract and Wrapped Ether (WETH).

The idea of freezing users’ assets without their consent didn’t go well with many in the community. One user reminded the core team that “freezing hardcoded LP smart contracts into the ETH clients is definitively not decentralized.”

Others went as far as to call it a scam and recommended reporting the Twitter account claiming to be the core EthereumPoW team.

The PoW hard fork has also found support from a prominent Chinese miner, Chandler Guo, who claims to be behind a 51% attack on Ethereum Classic.

The majority of crypto exchanges and stablecoin issuers have thrown their support behind the upcoming PoS-based Ethereum network. However, various crypto exchanges have stated that if a forked PoW chain gains traction, they would be in favor of listing the forked token as well, depending on the demand from the community.

The ETH mining sector is worth $19 billion, according to an estimate from crypto analytics firm Messari. With billions of dollars of infrastructure on the line, it’s understandable why miners would favor a hard fork, given that mining other PoW tokens such as Ethereum Classic (ETC) or Bitcoin (BTC) won’t be as profitable.

Related: Ethereum devs confirm the perpetual date for The Merge

Experts believe a forked PoW Ethereum chain won’t be as profitable either, as most of the community will shift to the new network. Kent Barton, tokenomics lead at ShapeShift DAO, told Cointelegraph:

“While the free market will ultimately decide, it’s likely that following some initial price discovery (and a potential opportunity to sell these forked tokens), these PoW forks will die off. A strategy that’s more likely to succeed is mining on other PoW chains such as Ethereum Classic.”

Ethereum co-founder Vitalik Buterin has been critical of the PoW fork as well, calling it an act of greed from a few outsiders. He recommended miners shift to Ethereum Classic as well.