In less than three months, investors have gone from a state of extreme fear to becoming aggressively bullish on crypto.

Nearly three months ago, one of the largest crypto projects, Terra/Luna, blew up — erasing over $60B in market value and setting off a chain of liquidations.

Since mid-June, crypto markets have staged a significant rebound:

• BitcoinBTC
  is up over 20%.
• EthereumETH
  is up over 80%.

All eyes are on Ethereum over the next few months as we head into the highly anticipated major network upgrade, the Merge.

The final testnet upgrade is expected to be completed today, before the main network gets upgraded — expected around September 19. Traders are also getting increasingly bullish on the event:

• Per Kaiko research data, Ethereum options activity surpassed Bitcoin’s for the first time ever — and traders are piling into call options with a $3,000 strike price.
• Call options with a strike price between $2.5-3K surpassed put options — a signal that investors are more bullish to the upside.

But according to Glassnode options data, traders are bullish onETH

for September but less so for October (Decrypt). Their research suggests that traders are preparing to sell the news post-merge.

Never straight up: “The Merge itself is an extremely risky event and any number of things can go wrong,” per Quantum Economics CEO Mati Greenspan.

Wave Financial’s Head of Decentralized Finance Henry Elder thinksETH

could pump into the Merge — but doesn’t see a sustainable rally until later in the second half of 2023, and here’s why (BBG):

• 99.9% of Ethereum’s actual users won’t see any difference for months or years.
• The supply and demand factors that are supposed to impact Ethereum’s price will take some time to trickle into prices.

Catch up: Why is the Merge such a big deal, and how can it impact Ethereum’s price?