Ethereum (ETH) Rebounds 7% To Over $1900, Here’s Why

Ethereum (ETH) staged a strong recovery from recent losses, tracking a broader gain in crypto markets.

The world’s second-largest cryptocurrency jumped 7% to trade above $1,900 for the first time since sinking to a 14-month low last week.

A bulk of this crash came after a bug in the ETH Beacon chain raised concerns over the stability of a full switch to proof-of-stake. But more recent data shows that despite doubts through last week, staking and DeFi interest in ETH has remained resilient. This is also factoring into ETH’s price action, with traders hoping that its switch to PoS- ETH 2.0- can support DeFi after the Terra crash.

ETH staking grows ahead of the merge

On-chain data showed that as of Monday, the number of addresses depositing on ETH 2.0 reached 12.7 million- with roughly 10.7% of ETH’s total supply now in ETH 2.0.

On May 30th, the number of staking ETH 2.0 deposit contract addresses has reached 12,711,363, and the staking rate has reached 10.72%, which means more than 10.72% of the Eth currently in circulation has been deposited in ETH2. https://t.co/X0iZNI20FI
— Wu Blockchain (@WuBlockchain) May 30, 2022

This shows that investors are still bullish on the merge despite the recent glitch. The move is expected to make the blockchain substantially more accessible to traders by reducing its energy and computing requirements.

The merge could occur as soon as August 2022, as said by the founder, Vitalik Buterin

Shipping to PoS could spur more institutional interest in ETH, given that it could make the token operate similarly to a debt

Can the merged help save DeFi?

Terra- once the second-largest DeFi blockchain after Ethereum, has severely impacted interest in space since its crash.

The blockchain’s tumble wiped out roughly $80 billion from DeFi, with the space continuing to decline as investors feared more regulation.

But analysts now see ETH’s merge as a potential boost for DeFi, given that it could attract much more interest into the space.

Ethereum Merge is the only positive catalyst now for battered DeFi to thaw the crypto winter

-Kelvin Wong, Market Analyst at CMC Markets said in a tweet

#Ethereum Merge is the only positive catalyst now for battered DeFi to thaw the crypto winter 🥶
Sentiment weak due to bug that may delay Merge.
Challenging to break major range supports$BTCUSD 30,100$ETHUSD 1930

Bulls attempting to fight back now https://t.co/GhHwDhghjB pic.twitter.com/aBu6Otw1Vj
— Kelvin Wong, CFTe, CAIA 🌊 (@KelvinSCWong) May 29, 2022

Other parties, including Thailand’s oldest bank, are also betting on a DeFi recovery after the Terra crash.

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Cryptolifedigital

Cryptolifedigital is a cryptocurrency blogger and analyst known for providing insightful analysis and commentary on the ever-changing digital currency landscape. With a keen eye for market trends and a deep understanding of blockchain technology, Cryptolifedigital helps readers navigate the complexities of the crypto world, making informed investment decisions. Whether you’re a seasoned investor or just starting out, Cryptolifedigital’s analysis offers valuable insights into the world of cryptocurrency.

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Cryptolifedigital

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Cryptolifedigital is a cryptocurrency blogger and analyst known for providing insightful analysis and commentary on the ever-changing digital currency landscape. With a keen eye for market trends and a deep understanding of blockchain technology, Cryptolifedigital helps readers navigate the complexities of the crypto world, making informed investment decisions. Whether you're a seasoned investor or just starting out, Cryptolifedigital's analysis offers valuable insights into the world of cryptocurrency.

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