Ethereum spiking ahead of Merge update, so does number of whales on network
Ethereum is making a big comeback on the cryptocurrency market after the announcement of the exact date on which the Merge network upgrade will go live and turn off the proof of work consensus algorithm for good.
As Ether gained 30% since the beginning of the month, we saw a massive increase in the number of whale addresses: more than 130 new wallets popped up on the network. The increasing number of whales might show that investors are buying back into the cryptocurrency.
🐳 #Ethereum has recovered quite well in July, up + 29% for the month and + 14% alone in the past 24 hours. Additionally, there’s an increase in the key 1k to 100k $ ETH address tier since early May where 131 new whale addresses have popped up on the network. https://t.co/uGfRQ4dEls pic.twitter.com/ri8MhGIP0o
– Santiment (@santimentfeed) July 17, 2022
In a recent crypto market review, we have highlighted the possibility of a breakout that might happen to Ethereum and a couple of other cryptocurrencies, following the mild recovery of the digital asset market.
As we see today, Ether successfully broke the local resistance line of the consolidation channel and swung to the next major resistance level right away. As of now, Ethereum is staying at its 50-day moving average resistance level, which it needs to break to continue the current recovery rally.
After the successful breakout, we saw a reversal in the number of addresses valued between 1,000 and 100,000 ETH since the drop in early May.
What might happen next?
Surprisingly, there are no signs of a quick fading rally that might have shown us that the second-largest cryptocurrency on the market is having a dead cat bounce and will reverse in the coming days.
Regardless, we should also note that the relatively strong price performance of Ethereum appeared during weekend trading days, which usually shows significantly less volume and liquidity, so even a low inflow volume could have moved the price of an asset significantly.