Two key factors are driving the current rally in cryptocurrency markets, according to a closely followed crypto trader.
Light was a pseudonymous analyst earlier in the month. told His 167,100 followers on Twitter said that crypto bulls had a chance to rally the markets after a terrible first half. However, they lacked the right narrative.
“The market now lacks a viable schelling point narrative. Its desire to have one is palpable. It is determined to get back what it has lost. When a vehicle is found to fulfill this longing, we will suspend disbelief. In the wreckage are nascent roots.”
Now, Light says the announcement of Ethereum’s (ETH) schedule for The Merge along with a relatively quiet macro backdrop are giving crypto bulls the energy to ignite rallies across the markets.
“If the last few days of price action didn’t make it obvious, The Merge has filled the narrative void. Macro calming opened space for a return to asset specific drivers.”
On July 15th, Ethereum developers revealed the timeline for ETH’s massive upgrade that will enable the leading smart contract platform to solve its network scalability issues. Ethereum’s current exchange price is $1,520. This is more than 70% higher than its low in 2022, which was $880.
Light adds that Ethereum’s strong performance over the last week is motivating traders to take on more risk, which he notes could lead to more rallies as others try to catch up or rotate their capital.
“Shorts had days to get out on BTC. There was no reason to short it when ETH did what they did. The ecosystem’s largest asset ripping 40% fuels risk-seeking behaviour everywhere else. This makes people realize that assets can rise in price. It leads to catch-up/rotational flows.”
Bitcoin (BTC), which is currently trading at $23,147, has seen a 4.50% increase in its past day and a 30% increase from its annual low of $17,600.
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