Top Cryptocurrency News: ETH Whales Transfer their Holdings to Exchanges Before Merge
The Ethereum blockchain is about to undergo one of the most significant changes since its conception, as it will transition from proof-of-work (PoW) to proof-of-stake (PoS) mining consensus.
The Merge date is scheduled for September 15, following the successful integration of the Goerli test net – the final test net merger before the actual transition. Ether (ETH), the native token, had seen a positive spike following the announcement of the Merge date in July, with the ETH price reaching a new six-month high of more than $2,000 but unable to consolidate the crucial resistance.
As we approach the Merge, the positive euphoria in terms of token price and market sentiment appears to be fading. As a result, a significant portion of ETH whales' holdings has dropped dramatically.
According to data from crypto analytic firm Santiment, the gap between Ethereum's top ten largest non-exchange addresses and exchange addresses is shrinking. Over the past three months, top whale addresses have sent a substantial amount of ETH onto exchanges, as non-exchange addresses have decreased by 11% while exchange-based addresses have increased by 78%.
The transfer of cryptocurrency onto exchanges is regarded as pessimistic sentiment, and it is frequently done by traders trying to benefit by selling their tokens. The increased volume of ETH owned by whale addresses on exchanges shows that these whales expect the price to fall in the near future.
Many market analysts feel the Merge will be a buy the rumor, sell the news scenario. Whereas the market rallied in the aftermath of the Merge date confirmation, the price may eventually fall following the crucial event. If positive news is expected sometime in the future, the price will frequently rise in anticipation of that date, but not always afterward.
The Merge would mark the completion of the 2nd of 3-phases in ETH's transition to the PoS consensus. The PoS transition process officially began with the Beacon chain's introduction in December 2020.
The current phase was expected to be completed by mid-2021, but due to several delays, it has now been pushed to the third quarter of 2022. The third phase would be the most important since it would provide various scalability features such as sharding and dramatically reduce blockchain energy usage.
The September 15 event is a key milestone for Ethereum; nonetheless, the Merge would merely represent a shift in mining consensus. After the third phase is completed, key benefits such as increased transaction capacity, cheaper gas prices, and lower energy usage will be realized.
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