Nicholas Merten: ETH Not In A Bear Market, Just Mid-Cycle Correction
According to a prominent crypto market analyst Nicholas Merten Ethereum (ETH) is not entering a bear market despite being in a downtrend for nearly nine weeks.
In a recent video session, Merten shared with the 492K subscribers to DataDash YouTube channel that those thinking ETH is in bearish market sentiment are wrong.
Ethereum’s technicals signal that ETH is only in a mid-cycle correction of an extended bull market, says the crypto analyst.
“Right now what we’re seeing is probably another mid-cycle correction, just like the even heavier one we had back in May of 2021 – 60% correction in 13 days. That wasn’t the bear market, [it] was much worse than the new correction we’re going through right now.”
According to Merten, Ethereum’s tokenomics structure keeps burning ETH over time will take significant amounts of sell pressure off from Ethereum, and act as a bullish driver.
“Ethereum, unlike Bitcoin which has a fixed supply at 21 million coins, will have the ability to be a deflationary asset, meaning that its supply will actually burn over time and decline.
Let’s just hypothetically say there’s a 100 million ETH today, and over time that would start to go down to 99 million, 98 million, 97 million, 96.5 million, it would start to go down over time so there’s going to be less in the circulating supply.
That is now possible because of two major dynamics that happened in 2021, and that has to do with the ETH2 staking contract as well as [the London hardfork] upgrade.”
A bear market would only be evident once a blow-off top scenario happens, according to the analyst, which is nowhere to be seen, he concludes.
“With all these dynamics that are contracting supply, more and more for ETH, and with generally growing investor interest in ETH versus bearishness…how in any way can we be entering into a bear market?
We would need much greater sell-side pressure, we probably need to find ourselves in a much more parabolic euphoric state where investable the punch bowl will be spilled over and the party will end, none of which we’ve seen so far.”
At the time of writing, ETH is trading at $3,347, up 3.6% on the daily chart.
