The number of ETH wallets holding over 1,000 ETH surges to a 15-month high as Ethereum Merge approaches.
This could be a bullish sign for ETH that investors expect a price rally after the Merge that started yesterday and is expected to be completed around Sep. 15, 2022. The last similar surge in wallet addresses happened around May 2021.
The surge in wallets corresponds with an increase in unique addresses, reported on Sep. 4, 2022. There were 204,571,827 addresses at the time. While an increase in the number of addresses does not necessarily mean more activity on the network, it does show an increase in the level of interest in Ethereum.
Why more ETH?
The number of wallets holding more than 1,000 ETH could be increasing in preparation for the airdrop of a new proof-of-work ETH token, which a small group of developers is working on. The new tokens will be airdropped to all existing holders of ETH who have been stocking up on ETH, as evidenced by the high utilization rate of ETH on AAVE, a DeFi lending platform. High utilization implies a large percentage of a lending pool has been lent out.
But there is more evidence that the cause for the surge in wallets holding more than 1,000 ETH is an anticipated price increase following the Merge.
One sign that ETH could be up for a rally is the number of traders shorting ETH, i.e., betting on its price falling. On Aug. 30, 2022, data from blockchain intelligence firm Santiment suggested traders shorting ETH had reached a number not seen since June 2021. Historically, prices have increased after periods of increasing short positions.
While a more long-term view, the number of ETH holders could be increasing because the Merge, if successful, will ultimately result in a slower issuance pattern for Ethereum, reducing the number of Ether in circulation and driving up the price.
ETH staking numbers healthy
The Merge is a software upgrade that will change the method used to validate transactions from proof-of-work to proof-of-stake on the Ethereum network. This means that instead of miners trying to solve complex cryptographic puzzles to add a new block of transactions to the network, users will “stake” or lock up 32 ETH on the network for a chance to validate transactions. At a later stage in the Ethereum upgrade process, users can withdraw their staked ETH.
At press time, there is a total of 14,267,547 ETH staked, with 421,990 validators set to secure the new network.
For Be[In]Crypto’s latest Bitcoin (BTC) analysis, click here.
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
