Crypto seasonal trends: Could The Merge break ETH’s ‘Septembear’ curse?
15:00, 6 September 2022
Ethereum (ETH) has entered what has historically been the worst month for its performance. But the altcoin king is also about to undergo a long-expected upgrade, The Merge, this month. Can Merge-anticipating ETH bulls break the ‘Septembear’ curse this year?
ETH’s September returns were, on average, almost three times as bad as those of BTC over the last seven years, Capital.com’s analysis shows.
But ETH has been outperforming BTC lately as The Merge – which is set to make the second biggest blockchain more efficient and environmentally-friendly – is finally set to happen around 13–15 September 2022.
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ETH to US Dollar
‘Septembear’ hits ETH harder than BTC
The September blues in no way affect only digital assets’ performance – their impact is felt across all assets classes. And so it should be no surprise that September is bad news for the cryptocurrency market, which is highly correlated with the equity markets, too.
ETH’s September returns over the last seven years have been almost three times worse than those of BTC. Bitcoin (BTC) historically returned a medium return of -6.6% over the last seven Septembers, Capital.com’s analysis of investment returns data showed.
Meanwhile, ETH’s September returns between 2015 and 2021 averaged out at –17.1% .
Ethereum (ETH) seasonal patterns
“Historically, September bodes poorly for risk assets, crypto and equity markets alike. In eight out of the last 11 years, Bitcoin has closed September in the red. In four out of the last six years, ETH has closed September down,” said Clara Medalie, head of research at cryptocurrency market data provider Kaiko.
Bitcoin (BTC) to US Dollar
‘Bullish anticipation’
Ethereum’s upgrade from a proof-of-stake to a proof-of-work consensus mechanism has been in the works for a while now. The migration’s journey can be dated back to 1 December 2020 with the launch of Beacon Chain, but it has been postponed several times on the way.
However, with a final upgrade, Bellatrix, now live, The Merge finalisation is imminent.
“This year could prove to be an exception to the ‘September effect’ phenomenon thanks to the upcoming Merge, which will radically change the Ethereum network,” Medalie said.
“There is bullish anticipation around this significant market event that promises to transform Ethereum into a more efficient, scalable, and environmentally-friendly network. The Merge could certainly have a bullish effect on prices, although there is small chance that problems could arise that could shake investor confidence,” she noted.
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