Bitcoin prices have underperformed Ether in the weeks leading to “The Merge.”
Dreamstime
Bitcoin
was largely unchanged on Thursday, with attention in the world of cryptocurrencies squarely on Ethereum following the blockchain network’s long-awaited fundamental upgrade known as the Merge.
The price of Bitcoin has fallen 1% over the past 24 hours to $20,100—holding firm above the key $20,000 level and remaining within the $20,000 to $25,000 range in which it has stagnated since mid-June. The largest cryptocurrency recently traded as high as $22,400 before Tuesday’s widespread market selloff wiped away days of gains.
“Bitcoin has stabilized once more around $20,000 after Tuesday’s bruising encounter with the U.S. inflation data,” said Craig Erlam, an analyst at broker Oanda. “The question will become how the crypto space reacts to the Ethereum Merge. It’s been a long time in the making and the question on traders’ lips right now is will it be the next bullish catalyst for cryptos or a ‘sell the fact’ event.”
Ether
was little moved in the hours since the Merge was confirmed to have completed, with the price of the second-largest crypto up less than 1% to $1,600. Interest in the native token of the Ethereum blockchain network has boomed in the lead-up to its long awaited upgrade, with Ether climbing some 50% since June in a remarkable outperformance of Bitcoin.
“We are likely to see the price of Ether retracing from its recent highs,” said Naeem Aslam, an analyst at AvaTrade, pointing to the build-up of anticipation leading up to the Merge and the likelihood that the upgrade may not be as smooth as hoped. “Expect a bumpy ride.”
Speculation has been rife over where Ether is heading, especially in the highly-liquid crypto derivatives market—where traders have exhibited optimism over the Merge in the options market, but have overwhelmingly shorted Ether futures. How traders react to the Merge in the days and weeks to come is likely to be a major factor across crypto—but more immediately, analysts are eyeing weakness in Bitcoin and the potential for another leg downwards.
Bitcoin’s “price has been consolidating up one month, down the next, up the next, down the next, inside a clearly defined range,” noted the analyst behind the Rekt Capital newsletter, which is focused on crypto technical analysis.
This is typical range-bound behavior, said the analyst, representing prices going up one month, down the next, and up the following month. “This month we have already seen the entirety of the upside move take place,” said Rekt Capital.
This could make Bitcoin vulnerable to a weakening of support around the $20,000 level—which has held up in recent months as a price at which traders are willing to swoop in and buy the token, according to the Rekt Capital analyst.
Beyond Bitcoin and Ether, altcoins or smaller cryptos were mixed. Cardano
and Solana
were up about 1%, while memecoins—initially intended as internet jokes—were lower, with Dogecoin
and Shiba Inu each losing about 1%.
Write to Jack Denton at jack.denton@dowjones.com