The Ethereum Price: Will It Drop in the Short or Long Term?

The Ethereum price could potentially drop in the short or long term, according to a new report from on-chain analytics firm Nansen.

The Ethereum price is rallying above critical levels as "The Merge" is on the horizon, the bullish momentum might receive a fresh push and finally take ETH north of $2,000. In the meantime, market participants are speculating about the immediate future of the second cryptocurrency by market cap. The Ethereum community is eagerly awaiting "The Merge," which could finally see the price of ETH breaking past the $2,000 mark. With the event just around the corner, market participants are optimistic that the resulting bullish momentum will be strong enough to take ETH to new heights.

It's been a tough week for Ethereum, as the popular cryptocurrency has seen its value drop significantly in recent days. However, it's still early in the game, and Ethereum could very well make a comeback in the near future. For now, though, Bitcoin remains the king of the crypto world.

The Bitcoin price is showing signs of bottoming out and could potentially rise sharply in value, similar to what we saw in 2020. Our editorial director Tony Spilotro makes the case for this in the video below.

The Merge: Who's most likely to sell?

The market is seemingly divided on "The Merge", the event that will complete the ETH transition to a Proof-of-Stake (PoS) consensus. Some expect the Ethereum price will operate under a "buy the rumor, sell the news event", while others are betting on a bullish continuation. It remains to be seen which camp is correct, but one thing is for sure: the Ethereum price is sure to be volatile in the days and weeks leading up to The Merge. So strap in and get ready for the ride!

It is possible that stakers could have a negative impact on the price of Ethereum, according to a recent report from on-chain analytics firm Nansen. The report looks into the top ETH stakers ahead of "The Merge", the staking dynamics, and its potential impact on the Ethereum price. While the report does not make a definitive forecast, it does suggest that stakers could have a negative impact on the Ethereum price.

In the long term, ETH prices are likely to be influenced more by the success of the Beacon Chain and the Shanghai upgrade than by the short-term whims of investors. Once the upgrade is complete and stakers can withdraw their funds, the market should have a better understanding of the true value of ETH.

It's important to note the difference between "liquid" and "illiquid" stakers when it comes to the new Beacon Chain. Liquid stakers are those using Lido and similar solutions, which allows them to withdraw their funds at any time. Illiquid stakers, on the other hand, are those that send their ETH to the Beacon Chain in 2020 and cannot withdraw their funds for an undefined period of time.

From the perspective of an investor, the Shanghai upgrade in 2023 could have a positive impact on the price of Ethereum. Nansen believes that stakers who are not able to sell their ETH immediately after the upgrade could help to support the price if it remains above $600. There is around 1 million ETH locked at that price which could help to stabilize the market.

The report paints a grim picture for the future of Ethereum, with around 71% of all ETH used to secure the PoS blockchain staked at a loss. Nansen claims that 18% of all staked ETH belongs to illiquid stakers who are in profit, and that this category is most likely to sell once they are able to unstake. This could have a devastating effect on the Ethereum network, leading to a further decline in value and a loss of confidence in the platform.

I believe that the recent selling by Nansen will not have a negative impact on the Ethereum price or on the crypto market in general. This could actually be a positive development, as it shows that Nansen is confident in the future of Ethereum post-Merge.

ETH’s price with minor profits on the 4-hour chart. Source: ETHUSDT Tradingview
It seems that ETH is slowly gaining traction, with minor profits on the 4-hour chart. This is good news for investors, as ETH seems to be slowly regaining its footing in the market.

Whales are accumulating Ethereum in anticipation of a price surge in 2022.

I believe that the increase in the number of ETH millionaires and billionaires will have a negative impact on the Ethereum price in the long run. These addresses have been labeled by the on-chain analytics firm as individuals and not smart contracts or exchange platforms, which could mean that they are less likely to invest in Ethereum in the future.

According to a new report, some of the largest players in the cryptocurrency space have been accumulating Ethereum (ETH) despite the coin's bearish price action. The report claims that these large players have "consistently been stacking Ethereum since the beginning of this year", despite the bearish price action. As seen in the image below, the trend has persisted and spiked in August and September this year.

Whales accumulate ETH in 2022. Source: Nansen
In 2022, whales will accumulate ETH, according to Nansen. This will provide them with a significant amount of capital to invest in projects and ventures.

There is much speculation about what the motives behind recent large ETH purchases could be. Some believe that the buyers are simply whales accumulating ETH in preparation for a price surge after "The Merge" event. Others believe that the whales could be planning to dump ETH shortly after The Merge, in order to cash in on the hype.