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The Merge Will Rally Ethereum Like a Bitcoin Halving: Arthur Hayes

In his latest blog post, former BitMEX CEO Arthur Hayes broke down how he expects Ethereum traders to react before and after the merge.

Based on the technicals of the upgrade, he suspects that Ethereum will rally after a successful transition in September, similarly to how Bitcoin rallies during its periodic halving cycles. 

The Theory of Reflexivity

In an article titled “ETH-flexive,” Hayes centers his bullish thesis around George Soros’s “theory of reflexivity.” The theory posits that there is a feedback loop between market prices, and the expectations held by market participants for a given market situation.

In the context of the merge, Hayes believes this phenomenon can rally Ethereum’s price due to the reflexive relationship between its price, and its deflationary properties. 

“If the merge is successful… traders will buy ETH today, knowing that the higher the price goes, the more the network will be used and the more deflationary it will become, driving the price higher, causing the network to be used more, and so on and so forth,” he explained.  “This is a virtuous circle for bulls.”

The merge will usher in two major changes for Ethereum: it will shift its consensus mechanism from proof of work to proof of stake, and also reduce ETH’s supply issuance rate by roughly 90%. This has led some to nickname the event the “triple halving.”

Combined with EIP-1559 – which burns ETH out of circulation with every transaction – ETH is expected by many to become a net-deflationary currency following the upgrade. Therefore, Hayes suspects that a feedback loop can form between ETH’s price appreciation, usage, and deflationary issuance.  

Alternatively, the co-founder noted that this feedback loop could work against ETH, driving its price down in the event of an unsuccessful merge. However, a look at ETH’s spot market activity, which has greatly outperformed Bitcoin in recent weeks, suggests that market participants expect a successful merge event. 

Not Selling the News

Ethereum derivatives data from Glassnode last week suggested that traders may be planning to “sell the news” once the merge actually takes place in mid-September

Specifically, the term structure for Ethereum futures is trading in backwardation leading all the way until June 2023. That means futures traders expect ETH’s price will drop by the maturity date of their contracts.

However, Hayes offered two alternative theories for why ETH may be experiencing buy pressure in the spot market, and sell pressure in the futures market.

On one hand, traders could be hedging their long physical ETH bets in the futures markets in the case of an unsuccessful merge. On the other, they could be hedging against their ETH position for general reasons, while accumulating spot ETH simply to pick up free chain-split tokens following a speculative POW fork.

Hayes expects that these traders will “buy back their hedge” following a successful merge and that any people attempting to sell their spot ETH will be in the minority. If there is indeed a selloff at that time, Hayes only plans to increase, rather than decrease, his position. 

“I expect we will see it play out similar to Bitcoin halvings,” he wrote. “We all know the dates they will occur, and yet, Bitcoin still always rallies post-halving.”

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Ethereum

Is Ethereum (ETH) The Most Obvious Trade in 2025?

TL;DR

  • ETH is the subject of multiple optimistic predictions, with some well-known analysts forecasting a rise to a new ATH soon.
  • Rising spot ETH ETF inflows reflect growing institutional interest and bullish momentum. However, recent positive exchange netflows hint at possible sell pressure ahead.

Is ETH the Right Horse?

Ethereum (ETH) has rebounded from the multi-year low of under $1,400 in April and currently trades at well above $2,500. 

Its resurgence brought back optimism among industry participants, with many viewing it as an attractive investment opportunity. The X user Crypto Rover (who has over 1.2 million followers) recently argued that ETH “is the most obvious trade in 2025.” 

$ETH is the most obvious trade in 2025! pic.twitter.com/NhywHpRnzT

— Crypto Rover (@rovercrc) June 19, 2025

He claimed the asset’s latest rally resembles the one from 2020, which continued until the end of 2021 when the price reached an all-time high of just south of $5,000. 

Crypto Caesar touched upon ETH’s positive performance in the past hour, summarizing that “it’s looking good for now.” The analyst urged investors to remain patient, claiming that only the potential outbreak of World War III could derail the bullish momentum.

Crypto Fella believes ETH’s next rally is a matter of when not if. The X user envisions new peak levels ahead, though the price may dip before heading higher.

Those willing to explore additional recent forecasts involving Ethereum can refer to our dedicated article here.

What Are the Indicators Signaling?

Over the past several weeks, there has been an evident influx of capital toward spot ETH ETFs. Data compiled by SoSoValue shows that the last day when the netflow was negative (outflows exceeding inflows) was on May 15.

Spot ETH ETF Inflows
Spot ETH ETF Inflows, Source: SoSoValue

The development generally indicates that a rising number of investors have been buying shares of these funds, showcasing their confidence in the asset. Spot ETFs hold actual ETH, so these purchases can benefit the bulls. 

Nonetheless, it’s not all sunshine and roses. The Ethereum exchange netflow has been predominantly positive in the last few days, suggesting that some investors have moved their holdings to centralized platforms. This is typically considered a pre-sale step and might have a negative influence on the valuation.


ETH Exchange Netflow
ETH Exchange Netflow, Source: CryptoQuant
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Ethereum Price Analysis: ETH Consolidation Continues as Bullish Momentum Starts to Fade

Ethereum has entered a consolidation phase after a strong rally in the last couple of months. The price has been ranging between key support and resistance zones, with multiple failed attempts to break above the $2,700–$2,800 region.

Despite the lack of immediate trend continuation, on-chain fundamentals such as exchange reserves hint at significant structural shifts. This sets the stage for potential volatility ahead as the market prepares for its next directional move.

Technical Analysis

By ShayanMarkets

The Daily Chart

On the daily timeframe, ETH remains inside an ascending channel, consistently finding support around the $2,400 area while struggling to break above the $2,800 mark.

The upper boundary of this channel, combined with the 200-day moving average and a key order block formed in February, is acting as a heavy resistance element. Each test of this level has led to a rejection, but so far, the structure hasn’t broken down, indicating that bulls are still in control for now.

Momentum, however, is weakening. The RSI hovers around the midline at 51, reflecting indecision and a lack of strong directional drive. If ETH can reclaim the upper range and flip the $2,700–$2,800 area into support, it could initiate a new leg higher toward $3,000 and above. On the flip side, a breakdown below $2,400 would shift the bias bearish, exposing the $2,150 support zone.

The 4-Hour Chart

Zooming in on the 4H chart, ETH is still grinding within the same rising channel. After the recent drop from $2,875 to $2,430, the price retraced into the 0.5–0.618 Fibonacci zone, but has been rejected to the downside and is now consolidating below it. This area, between $2,600 and $2,700, has repeatedly acted as a supply zone, rejecting bullish attempts multiple times. For short-term traders, this remains the key level to flip.

Until this resistance breaks, ETH may continue its range-bound behavior. The RSI has recovered slightly from oversold conditions, now sitting near 52. While this suggests a slight uptick in momentum, there’s still no clear sign of bullish dominance. If the bulls fail to break above this key fib zone soon, another drop toward the lower boundary of the channel near $2,400 is likely.

Sentiment Analysis

One of the most important long-term signals for Ethereum remains the consistent downtrend in exchange reserves. Currently sitting at 18.8 million ETH, this is one of the lowest levels in recent history. Exchange reserve data indicates how much ETH is held on centralized trading platforms, meaning a downtrend signals that coins are being withdrawn into self-custody, staking, or cold wallets.

Historically, sustained drops in exchange reserves suggest a supply squeeze narrative building beneath the surface. Fewer tokens on exchanges reduce the available selling pressure and can lead to explosive upside when demand rises.

Even as ETH struggles to break out technically, this silent accumulation phase shows confidence among long-term holders. If this trend continues, it may act as a powerful tailwind once technical resistance levels are finally breached.

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Disclaimer: Information found on CryptoPotato is those of writers quoted. It does not represent the opinions of CryptoPotato on whether to buy, sell, or hold any investments. You are advised to conduct your own research before making any investment decisions. Use provided information at your own risk. See Disclaimer for more information.

Cryptocurrency charts by TradingView.

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Ethereum

Trump-Tied Company Files for Dual Bitcoin and Ethereum ETF Product

Trump Media & Technology Group (TMTG), parent company of Truth Social, has partnered with investment firm Yorkville America Digital to file for a spot bitcoin and ethereum exchange-traded fund (ETF) with the U.S. Securities and Exchange Commission (SEC). Truth Social Owner Seeks Approval for 3:1 Bitcoin-Ethereum ETF The “Truth Social Bitcoin and Ethereum ETF…
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