By Senad Karaahmetovic
price may face further selling pressure heading into the Merge “as investors digest Merge implications and shift to a wait-and-see approach regarding future upgrades,” a Bank of America strategist.
“We expect blockchains like , , and to increasingly capture market share until Ethereum’s current headwinds are addressed,” the analyst said.
On the other hand, price is trading below the $20,000 mark again after three consecutive days of strong selling activity.
The world’s largest digital asset closed over 9% lower last week after the selloff was fueled by hawkish comments from Fed Chair Jerome Powell on Friday.
Although Bitcoin price is up about 1.5% today, despite futures extending selloff, the digital asset is struggling to return trading above the $20,000 handle. The analyst notes “uncertainty” as buying momentum fades.
“Our view is that risks related to a mild recession are likely discounted, but the potential for a hard recession (our macro colleagues expect S&P EPS to fall in 2023 and question the excitement around 8.5% inflation) may result in another risk asset correction including crypto/digital assets,” the analyst wrote in a client note.
The strategist notes that BTC exchange net outflows accelerated over the last 2 weeks “significantly” compared to the prior 3 weeks.
“Supply remains tight and continuous exchange net outflows indicate that investors continue to HODL (bullish). ETH saw its 3rd consecutive week of decelerating exchange net outflows,” the analyst added.