While Ether had good rally in July, sentiment around coin is not looking so good
Ahead of September’s Merge update, Ethereum is in a weird place as investors are not yet ready to invest in the network prior to the fundamental change – since it is not yet clear what kind of effect the PoW switch will have on the mainnet.
Massive inflows to centralized exchanges is one of the main indicators of high fear among investors who move their holdings to exchanges to sell as soon as they can if something does not go as planned for the new version of Ethereum.
📊 As #Ethereum traders await the September proof-of-stake consensus mechanism transition, there are still hints as to where we go between now & then. Negative sentiment & $ETH shifting to exchanges are a couple things to check out in our latest insight! https://t.co/uOF7h58P3X pic.twitter.com/4RramKIVpW
— Santiment (@santimentfeed) July 26, 2022
Despite the insecurity of some market participants, many test environments of Ethereum received the update and had no technical issues with it whatsoever. The only thing that investors should worry about right now is the unpredictable reaction of the cryptocurrency market.
Luckily, the market reacted more than positively to the reveal of the exact date when the Merge update for Ethereum will go live, as the second biggest cryptocurrency on the market saw a massive 60% price increase in the last two weeks.
Unfortunately, the “reveal rally” was not supported by larger retail and institutional investors, which is why Ether is reversing back below $1,500.
What do other indicators tell?
While the number of ETH on centralized exchanges is growing exponentially, other indicators show that sentiment around the cryptocurrency is not doing well considering the overall situation on the digital assets market.
Additionally, trader sentiment dropped even lower after the market failed to push the cryptocurrency’s price back above May’s level of $2,000. For now, the majority of participants do not expect anything exceptional from the second biggest cryptocurrency until the fundamental update goes live.