It has been a volatile but positive week for cryptocurrencies, as traders ignored warnings from crypto winter veterans of further downside and jumped back into the market at the first sign of price gains.
Evidence of the sentiment reversal can be found in the Cryptocurrency Fear and Greed Index, which has risen into the fear zone after spending record time in extreme fear territory due to the price collapse in May and June.
As for what triggered the extreme fear rally, a closer look at the timeline points to the announcement of the expected date for the Ethereum Merge, which came on July 15.
Data from Cointelegraph Markets Pro and TradingView shows that, Following the revelation of the merge date, the price of Ether (ETH) has risen 38.5% from $1,190 to a daily high of $1,650 on July 22, amid an overall green day in the market.
Along with the rise in the price of Ether, the total cryptocurrency market capitalization has risen 15% in the last week to its current value of $1.051 trillion.
Ethereum-associated projects get a boost
Further evidence that the excitement around Ethereum’s transition to proof-of-stake (PoS) is fueling the rally can be found by looking at the top gainers of the past week, which includes several projects associated with the leading smart contract protocol.
When Ethereum goes PoS, the vast mining network that currently secures the network will be orphaned and will need a new chain to mine on.
Ethereum Classic (ETC) is one of the best options in terms of network design and compatibility, as it is technically the original Ethereum proof-of-work chain.
The price of ETC has gained 100% in the last nine days, suggesting that there is a large contingent of traders also anticipating a migration of miners to Ethereum Classic, which could bode well for the token price in the long run.
Liquid staking regains its charm
The other notable winner benefiting from Ethereum-related developments is Lido DAO (LDO), a liquid staking platform that allows depositors to stake their Ether in exchange for stETH, which is a one-to-one representation that can used as collateral in decentralized finance.
Data from Cointelegraph Markets Pro and TradingView shows that, Since the Merge data was revealed, the price of LDO has risen 80% from $0.885 to its current price of $1.59, after briefly reaching a high of $1.92 on July 20.
In addition to the boost gained from its association with the Ethereum merger, the price of LDO has also benefited from the addition of support for other protocols such as Solana (SOL) and Polkadot (DOT), as well as its expansion to protocols of layer 2.
Lido is launching stETH on Layer 2 ️
Ethereum is scaling, and so is Lido.
Lido stakers will soon be able to use their stETH assets in DeFi on Layer 2.
Read more about it here: https://t.co/QCsQry4V41
— Lido (@LidoFinance) July 18, 2022
Lido launches stETH at layer 2️
Ethereum is climbing, and so is Lido.
Lido stakers will soon be able to use their stETH assets in DeFi at Layer 2.
Read more about it here:
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