Economist and crypto trader Alex Kruger believes that Ethereum (ETH) could rally as it transitions to a proof-of-stake consensus mechanism, colloquially known as the merge.
Kruger tells his 145,500 Twitter followers that the August inflation numbers as measured by the US Consumer Price Index (CPI) indicator, which is next scheduled to be released on September 13th, will boost risk assets over the short term.
[adinserter block="1"]Consequently, Kruger says that Ethereum could surge by up to 28% from the current levels.
“If trading ETH directionally for the merge probably want to go long into the event with stops right above the August lows and shoot for a $1,700 break to take price into the $1,800 – $2,100 range. Expect CPI next week to give risk assets a one-week boost.”
Ethereum is trading at $1,635 at time of writing.
While arguing that a stock market rally is necessary to trigger a crypto bull market, Kruger says that Ethereum could continue to outperform Bitcoin (BTC) following the transition to a proof-of-stake consensus mechanism.
“Fundamentally the merge improves ETH attractiveness via lower energy consumption and more importantly vastly improved tokenomics. Continued (yet diminished) outperformance vs. BTC makes sense on a larger time frame.
That is highly likely not enough to kick start a bull market by itself. Need a bull market in equities for that.”
The economist and crypto trader, however, says that the days following the merge could get “messy” as Ethereum trades are closed.
“The merge unwind could be very messy, as spot longs and futures shorts get closed. If playing long, naked futures should have an extra kick (futures, not perpetual futures).”
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Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised 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 buying or selling of any assets including cryptocurrencies, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
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