The Ethereum (ETH) blockchain saw a surge in investor interest, as people are hopeful of profits with the upcoming ETH Merge.
A short while back, Ether soared to a two-month high after its developers successfully completed the final rehearsal for the upgrade. The world’s second-biggest cryptocurrency climbed as high as $1,927 in early August, marking its highest level since early June.
The ETH whales moved their holdings to on-exchange addresses with a recent drop in the holdings of non-exchange addresses.
As per a report that records activity over the last three months, there has been an 11% drop in the assets of Ethereum in non-exchange addresses. At the same time, there was a whopping 78% increase in the holdings of whale on-exchange addresses.
As per on-chain analytics firm Santiment, the Ethereum supply within top exchange addresses has risen with traders dumping their holdings onto large exchanges during the 2022 market decline.
Santiment wrote on August 3:
“Ethereum has seen its supply held by top exchange addresses rise, which makes sense with traders dumping their holdings on to large exchanges during the 2022 slide. Watch for a decline in top $ETH exchange address holdings as a bullish signal.”
As per estimates of early August, a combined 7 million ETH were held by the top 10 exchange addresses, which was the highest since May 2021. Santiment also noted that a decline in the top ETH exchange address holdings might be a positive price indicator.
What Caused The ETH Price Surge?
In July 2022, after multiple delays, the news about the merge finally happening positively impacted the Ether price. It rose to a 6-month high of approximately $2,000. Although this was an excellent bullish price movement, it was an abortive move to hit the critical resistance mark at that time.
The cumulative data from July till now has revealed a plunge in the price of several altcoins, including Ethereum. Currently, market sentiments aren’t great either.
This is causing the price to take a severe hit, even though the merger is now closer than ever before. There has also been a rapid reduction in the holdings of the Ethereum whales.
The Ethereum 2.0 upgrade is one of the most significant events to take place within the crypto industry and undoubtedly, all eyes are on it. The event intends to shift the Ethereum Proof-of-Work (PoW) consensus mechanism, which uses mining, to Proof-of-Stake (PoS) mechanism which will drastically reduce the platform’s carbon footprint and make processes faster.
The September merge would entail the successful completion of phase 2 out of the 3 stages of migration to the PoS system. The migration to the PoS consensus mechanism began in December 2020. The process initiated with phase 1 which included the introduction of a Beacon chain.
Phase 2 of the Ethereum merge, was supposed to be completed in 2021. However, the plan didn’t really work out due to certain delays in the process. This led to a shift in the schedule, driving it into the Q3 of 2022.
The last phase of the transition is obviously the most significant of all three phases as it will supposedly be activating some vital features like reducing the energy consumption of the blockchain and sharding.
As per reports, the merge process is already past 95%, considering the date scheduled for the event. The merge process will take place following the successful completion of the Goerli test net.