Not All Cryptocurrencies Rally Before Merge Update
The cryptocurrency market and its participants are preparing for the upcoming Merge update on Ethereum which will most certainly affect almost all digital assets. While some pieces that will benefit from the transition are rallying, others are desperately trying to recoup what they lost before.
XRP does not go up on the Merge train
The Merge rally has already happened in the market when the update date was made public. Many assets, including XRP, suddenly gained more than 20% in value.
Due to the speculative nature of the rally, XRP was unable to gain a foothold above the local resistance level and fell shortly thereafter, now trading at $0.3. From a technical perspective, XRP fell below the important trendline, which previously served as a short-term support level.
At press time, XRP is desperately trying to get back into the trend as it will most likely miss the near-term rally caused by the merger update if it fails to rally above the price level of $0.36.
Ethereum Classic is in a strong rally
In the past 24 hours, Ethereum Classic has gained over 25% in value. In addition to the market price, we are seeing a rapid increase in the network hashrate. The volatile movement in the market correlates with the Ethereum Bellatrix update – the last step before the Merge implementation.
The key driver behind this massive rally is investors’ belief in the network’s intrinsic growth following the switch of much of Ethereum’s hashrate to Ethereum Classic, justifying its reputation as the “real” Ethereum.
Originally, Ethereum Classic was created as a reaction to the events that happened with Ethereum in 2016, when the network suffered a major hack. With each update, the two channels moved away from each other, becoming independent projects.
The Merge update will push two networks even further apart. Of all the alternatives, Ethereum Classic will most likely become the “main PoW network” as no other candidate shows such rapid growth in value or hashrate.
Meanwhile, some industry experts believe that a new ETH PoW will beat ETC in terms of hashrate and will most likely be the primary way to mine Ethereum.
The US dollar does not stop
Unfortunately for cryptocurrency investors, the US Dollar rally is far from over as the DXY Index continues to rally despite what appeared to be a correction yesterday. The reversal pattern on the chart did not work out as expected and the currency continued to rally.
The continued bullish trend of the US Dollar will continue to pressure the digital asset market, given its main effect, which has driven investors away from risky assets, including cryptocurrencies and other digital assets.
For now, the next event that could bring the value of the dollar back to lower levels would be the release of CPI data on September 13, which coincidentally occurs almost the same day as the Ethereum meltdown.