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Popular Trader Hints ‘Pump and Dump’ on the Horizon for ETH

Popular Trader Hints

The impending Ethereum (ETH) Merge upgrade is expected to boost the value of the cryptocurrency since it will strengthen the blockchain following the PoS transition. Although there is a lot of enthusiasm for the upgrade. 

However, a segment of the cryptocurrency market feels there are some reasons to be concerned, particularly with the potential introduction of additional Ethereum tokens into the ecosystem.

In this line, a popular crypto trader known as Tradersweekly on TradingView has stated that one of the Merge's immediate effects would be a pump and dump situation in Ethereum. This will take place as a result of token distribution from the previous Proof-of-Work (PoW) protocol.

The trader predicts a dump from newly minted tokens that will enter the market alongside the Merge. The trader also admitted that the Ethereum price will rise, but for a short period of time.

“Because of these 'out of nowhere’ tokens, we believe the price of ETH may initially rise (especially before the Merge). However, we expect the possible rise to be transitory, and freshly minted tokens will be dumped on the market alongside Ethereum (after the Merge),” according to the trader.

Ethereum likely to correct to $900

At the same time, the trader saw that the pump and dump situation is reinforced by technical indicators indicating very low liquidity in Ethereum. In this case, the expert predicted a downside of about $1,000 and $900.

Elsewhere, another crypto trader, Mihai Iacob, is positive on Ethereum, saying that the asset has outperformed Bitcoin (BTC) in the past two months.

“Technically, the ETH has strong support near $1,300-1400 zone, and the eased selling pressure from BTC would most likely lead to an increase in ETH to $2,500,” he added.

The bullish sentiment surrounding the upgrade stems mostly from the fact that Ethereum will become less inflationary as a result of the event, enhancing its status as a store of value.

Cautious approach to the Merge 

Notably, several market analysts have expressed reservations about the upgrade's overall impact. As reported by  CoinGabbar, Antoni Trenchev, co-founder of crypto financing firm Nexo, believes there is no certainty that the Merge upgrade will trigger an Ethereum rally.

According to Trenchev, Merge's early performance will determine how the 2nd-ranked cryptocurrency by market cap will perform in the future.

Despite the bear market, Ethereum has made gains, currently trading at $1,737, increasing more than 5% in the last 24 hours. And it has increased by more than 14% in the last seven days.

Read also: Security Issues With Ethereum PoW, According to DeFi Giant Supporting Merge

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