Liquidations of leveraged short positions in Ethereum’s native token ETH surged over the weekend along with a strong move above the key USD 1,300 price level as sentiment in the ETH market improved markedly.Per data from the derivatives tracking site Coinglass, liquidations of leveraged ETH shorts reached USD 179.4m on Saturday, the highest level of liquidations in more than three months. The weekend spike in liquidations came as ETH crossed the USD 1,300 barrier and established itself around USD 1,350.The strong move was followed by another jump in short liquidations on Monday, as the price of ETH flirted with the USD 1,500 level for the first time since June 12. At the time of writing (10:10 UTC), USD 113m in ETH shorts had already been liquidated across crypto exchanges since midnight UTC time.
The bullish moves for ETH came as ‘the Merge’ – Ethereum’s transition from the proof-of-work (PoW) to the proof-of-stake (PoS) consensus mechanism – moved closer, with September 19 now officially proposed as the tentative Merge date.However, some argue that the Merge may be pushed yet again, depending on the market conditions. Martin Hiesboeck, Head of Blockchain and Crypto Research at digital trading platform Uphold, commented in an email to Cryptonews.com that, “Ethereum developers came out with a timeline for The Merge that seems more credible than anything we have seen so far, namely several steps leading up to the week of September 19. We remain skeptical, and if the overall markets don’t improve, the launch could be pushed back further still.”Rising sentiment, flippening, and warningsNonetheless, the news that the highly anticipated event is inching closer has led to increased optimism in the Ethereum community, which also coincided with bullish price moves from late last week. Since July 14, when the tentative Merge date was revealed, ETH has risen by well over 30%.
The development was also pointed out on Twitter, where one user said the Merge has “filled the narrative void.”
In the Ethereum community on Reddit, some fans spent their Sunday discussing when ETH would “flip bitcoin,” referring to a potential event where ETH’s market capitalization exceeds that of bitcoin (BTC).“I’m in the camp that believes it will [flip]. But 2023 may be a bit early,” one user commented, while another, who admitted that his “entire portfolio is ETH only,” opined that it will probably never happen.Meanwhile, other crypto community members took the opportunity this weekend to comment on ETH from a trading and investment perspective, with some arguing the digital asset is still “expensive” from a fundamental standpoint.Among them was Andrew Kang, co-founder of crypto hedge fund Mechanism Capital, who on Twitter stated that activity and earnings on the Ethereum network have declined more than the price of ETH from its peak last year, resulting in a high price-to-earnings (PE) ratio.“I think it’s possible that ETH bottoms with a high PE, but I’m not betting on it yet,” Kang said, before admitting that many venture capitalists “are ok to buy expensive.”
The view that ETH is “expensive” was not shared by everyone, however. Popular crypto trader and economist Alex Krüger called PE “a rather useless metric for long term analysis when earnings are so volatile and reflexive.” “Value is subjective. Narratives shift. When it comes to crypto (layer 1s) valuation metrics are only useful for driving narratives,” Krüger wrote in response to Kang’s tweet.Meanwhile, others warned that the current rally in ETH is unlikely to last, with Chris Burniske, a partner at venture capital firm Placeholder, sounding the alarm over what he called “bear market pumps.” “Bear market pumps have to happen to get the majority offsides, thereby enabling further nasty falls,” Burniske said. He added that even though the market for a while has been “too bearish to fall further,” this doesn’t mean the market is “out of the woods.”“Don’t get too cocky one direction or the other,” he warned, while recommending the dollar-cost average (DCA) strategy as “most peoples’ best bet.”At 10:50 UTC on Monday morning, ETH traded at USD 1,487, up 10% for the past 24 hours and 27% for the past 7 days. It was, at the time of writing, the day’s best performer among the top 10 cryptoassets by market capitalization.
Source:cryptonews.com