The Crypto Market Is Uncertain: Could Ethereum Overcome Bitcoin Over the Merge?

The market is still struggling to recover from the sell-off that occurred over the weekend. Bitcoin is among the worst performers in the market, and it might weaken further during September. Other cryptocurrencies, such as Ethereum, are also trading at almost double-digit losses.

ETH Might Continue to Outperform BTC During September

The next couple of weeks will see the market focus on the upcoming Ethereum merge, which will involve the migration of its network to a Proof-of-Stake consensus. The price of ETH has risen significantly in the past week due to the positive narrative surrounding this event.

Due to the heavy price action that Bitcoin has experienced in the past week, crypto prices have been moving sideways. According to Joshua Lim, the head of derivatives at Genesis Trading, the key metric he looked at was the BTC Dominance, which is the percentage of the total market cap composed of Bitcoin and ETH.

Despite the volatility experienced by the major cryptocurrencies in the past couple of weeks, Lim noted that the BTC Dominance is still at multi-year highs. The ETHBTC ratio is at 0.0733, and its all-time high stands at 0.0880. The last time the price of ETH was close to its current level was during the beginning of the last major decline.

Ethereum appears to be favored by market players to reach the $3,000 – $3,800 range. A total of 3,4 million options contracts with a call option are betting on an increase in the price of ETH. Meanwhile, 808,396 contracts with a put option are betting on the reverse.

Cryptocurrencies Experience Losses

This past week, there have been various developments in the economy. One of these is the statement made by Jeremy Powell, the chairman of the Federal Reserve. He said the central bank would have to raise rates to contain the rising inflation rate. That caused the stock market to tank.

The stock market lost over $1 trillion in value by Sunday. That is significantly larger than the entire cryptocurrency market cap. The effects of Powell’s speech would continue to show impact. The S&P 500 lost 3.3%, and the Nasdaq was down by 4%.

The impact of the losses on the stock market was felt in the crypto market. The total amount of money the cryptocurrency market lost was around $100 billion during the period. It continued to fall below the $1 trillion mark. Aside from this, the rising inflation rate also added to the concerns about the economy. Likely, the Fed will raise rates by 75 basis points in September.

After reaching a low of $919 billion earlier in the day, the total market cap of the cryptocurrency industry has recovered to around $921 billion.

Taking a Look Ahead

Despite a small recovery in the cryptocurrency market over the last few hours, there is still a lot of uncertainty regarding the market’s direction as we advance. The speech by Powell on Friday came just a few days before the weekend, which prevented the stock market from absorbing and regulating the news.

The expected rise in interest rates, similar to what happened before, could cause another sell-off in the market. That is already happening in the crypto market, where investors have been exiting Bitcoin and other digital assets.

September has been a historically bad month for the cryptocurrency market. One of the most notable examples was the market crash that happened in September 2021. If the market continues to follow this trend, then there will be more losses to come.