Over the last three months, holdings at the top 10 Ethereum non-exchange addresses have decreased by 11%, while holdings at whale addresses on exchanges have increased by 78%.
When the Ethereum blockchain switches from its current proof-of-work mining consensus to a proof-of-stake (PoS) one, it will undergo one of the biggest updates since it was first created.
After the successful Goerli testnet integration, the last testnet merger before the actual transition, on September 15, the Merge date is set. Following the announcement of the Merge date, the price of Ether (ETH), the native token of Ethereum, experienced a bullish surge, rising to a new six-month high of over $2,000 but failing to consolidate at the key resistance.
As the Merge draws closer, the bullish enthusiasm in terms of token price and market sentiment appears to be waning. A large number of ETH whales have seen a significant decline in their holdings.
According to data from crypto analytics company Santiment, the difference between the top 10 largest non-exchange addresses and exchange addresses on Ethereum is shrinking. Top whale addresses have transferred a sizeable amount of ETH to exchanges over the last three months. Exchange-based addresses have increased by 78% while non-exchange addresses have decreased by 11%.
Bearish sentiment is generally reflected in the flow of cryptocurrencies onto exchanges, which is frequently done by traders looking to make a profit by offloading their tokens. This could mean that whales anticipate a drop in price in the near future.
Numerous market analysts think that the Merge will be a case of “buy the rumor, sell the news.” The adage means that if good news is anticipated at some point in the future, the price will frequently increase prior to that time but may not do so necessarily after. Following the confirmation of the Merge date, the market spiked, but it might eventually experience a price drop.
I think #Ethereum will drop so hard on the Merge day.
The whole anticipation is getting not bought up on the spot market but on the futures market.
— Crypto Rover (@rovercrc) August 23, 2022
The Merge will complete the second of three stages in the conversion of Ethereum to PoS. The Beacon Chain’s debut in December 2020 marked the start of the procedure.
By the middle of 2021, the current phase was supposed to be finished. Though it is now expected to happen in the third quarter of 2022 due to several delays. The third phase will be the most important because it will introduce several scalability features like sharding and drastically lower the energy consumption of the blockchain.
Although the Sept. 15 event is an important turning point for Ethereum, the Merge only signifies a shift in mining consensus. After the third phase is finished, significant advantages like a high transaction capacity, lower gas costs, and a decrease in energy consumption will become available.