Will Crypto Sustain Its Rally? Top Trader reveals primary catalysts driving the surge in digital asset markets
A closely watched crypto trader says there are two key factors driving the current rally in cryptocurrency markets.
Earlier this month, pseudonymous analyst Light told his 167,100 Twitter followers that after an abysmal first half of the year, crypto bulls were in a position to inspire a rally in the markets, but lacked the narrative to do so.
“The market now lacks a viable plot point narrative. Yet the desire for one is palpable. It wants to make back what it lost. We will suspend disbelief in an attempt to do so when a vehicle emerges to carry this latent desire. In the wreck is incipient roots.”
Now, Light says the announcement of Ethereum’s (ETH) timetable for The Merge along with a relatively quiet macro backdrop is giving crypto bulls the energy to ignite rallies across the markets.
“If the past few days of price action didn’t make it obvious, The Merge has filled the narrative void. Macro dampening opened the way for a return to asset-specific drivers.”
On July 15, Ethereum developers revealed the timeline for ETH’s massive upgrade that will enable the leading smart contract platform to address the network’s scalability issues. At the time of writing, Ethereum is changing hands at $1,520, up over 70% from its 2022 low of around $880.
Light adds that Ethereum’s strong performance over the past week is motivating traders to take on more risk, which he notes could lead to more rallies as others try to catch up or rotate capital.
“Shorts had days to get out on BTC. Zero reason to be short when ETH did what it did. A major resource in the ecosystem tearing up 40% increases risk-seeking behavior everywhere else. It makes people consider that assets are actually can go up in price. That leads to catch-up/rotation flows.”
At the time of writing, Bitcoin (BTC) is exchanging hands at $23,147, up 4.50% in the last day and over 30% from its annual low of around $17,600.
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Disclaimer: Opinions expressed by The Daily Hodl are not investment advice. Investors should do their due diligence before making high-risk investments in Bitcoin, cryptocurrency or digital assets. Please note that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment adviser. Please note that The Daily Hodl participates in affiliate marketing.
Featured image: Shutterstock/robuart/Sensvector
