It’s been a volatile but positive week for cryptocurrencies as traders ignored warnings from crypto winter veterans that there was more downside in store and re-entered the market at the first sign of rising prices. .
Evidence of sentiment reversal can be found in the Crypto Fear & Greed Index, which climbed into the fear zone after spending a record time in extreme fear territory due to the price crash in May and June.
As for what triggered the rally out of extreme fear, a closer look at the timeline indicates that announcement of the scheduled date for the Ethereum merger, which took place on July 15.
Data from Cointelegraph Markets Pro and TradingView shows that, following the disclosure of the merger date, the price of Ether (ETH) climbed 38.5% from $1,190 to a daily high of $1,650 on July 22 amid an overall green day in the market.
Along with the rise in Ether’s price, the cryptocurrency’s total market capitalization has increased by 15% over the past week to its current value of $1.051 trillion.
Ethereum-related projects get a boost
Further proof that the excitement around Ethereum switch to proof of stake (PoS) is what’s fueling the rally can be found by looking at last week’s top earners, which includes several projects associated with the leading smart contract protocol.
As Ethereum transitions to PoS, the vast mining network that currently secures the network will be orphaned and will need a new chain to mine.
The ETC price has earned 100% in the last nine dayssuggesting that there are a large number of traders anticipating a migration of miners to Ethereum Classic as well, which could bode well for the price of the tokens in the long run.
Liquid staking gets its mojo back
The other notable winner benefiting from Ethereum-related developments is Lido DAO (LDO), a liquid staking platform that allows depositors to stake their Ether in exchange for stETH, which is a one-to-one representation that can be used as collateral in decentralized finance.
Data from Cointelegraph Markets Pro and TradingView shows that since the reveal of the merger data, the price of LDO has risen 80% from $0.885 to its current price of $1.59 after briefly hitting a high of $1.92 on July 20.
In addition to the momentum gained from its association with Ethereum Merge, LDO’s price has also benefited from the addition of support for other protocols like Solana (FLOOR) and polka dot (POINT), as well as its extension to Layer 2 protocols.
Lido launches stETH on Layer 2 ️
Ethereum is evolving, and so is Lido.
Lido stakers will soon be able to use their stETH assets in DeFi on Layer 2.
Learn more here: https://t.co/QCsQry4V41
—Lido (@LidoFinance) July 18, 2022
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. Every investment and trading move involves risk, you should conduct your own research when making a decision.