Ethereum (ETH-USD) perked up in Tuesday afternoon trading ahead of its long-awaited transition to a Proof-of-Stake algorithm from Proof-of-Work, otherwise known as the Merge, while bitcoin slumped in the wake of broad risk-off sentiment.
While the correlation between ETH (-2.5%) and BTC (-14.9%) are known to be strong, the former has easily outshined the latter in the past month, as seen in this chart. That divergence comes as ether’s (ETH-USD) blockchain Merge, which is expected to significantly reduce its environmental impact as well as boost its network security, is just days away from taking effect.
As for bitcoin (BTC-USD), the world’s largest cryptocurrency by market cap, its been stuck in a rut since the beginning of September, wobbling slightly above and below $20K. The boring price action could prove to be a bottoming signal, or it could be the case in which buyers dabble at these prices only to see the token’s price fall further and thus a snowball effect of selling takes hold.
“Markets rarely give investors much time to buy the bottom. #Bitcoin has been trading near $20K for the past 12 days. More likely $20k will prove to be a false bottom, giving suckers plenty of time to climb aboard a sinking ship. Better to abandon ship before the bottom drops out,” Euro Pacific Capital Chief Economist Peter Schiff, a popular BTC skeptic, wrote in a Twitter post.
Crypto-related stocks, meanwhile, were mixed at the time of writing, with MicroStrategy (MSTR) -1.1%, Coinbase Global (COIN) +0.7%, Marathon Digital (MARA) +5.6%, Riot Blockchain (RIOT) +3.2%, Hut 8 Mining (HUT) -0.3% and Greenidge Generation (GREE) -2.3%.
Previously, (Sep. 4) stablecoin demand resumes decline, equivalent of crypto QT.