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Heading into the Merge, Ethereum experienced its largest daily exchange inflow since 2016 on Sept 14th. As we move forward from this historic event, we reflect and explore what’s next!

This is the Delphi Daily. Let’s dive in.

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📊 The Merge Brings Large Exchange Inflows

The wait is finally over! Last Thursday, Ethereum successfully transitioned from Proof-of-Work (PoW) to Proof-of-Stake (PoS) consensus, setting forth a new era for Ethereum and the wider crypto ecosystem.
Since the Merge timeline was announced on July 14th, ETH has significantly outperformed BTC and most other asset classes. However, ETH has shed most of these gains over the weekend after the Merge.
Since the activation of PoS, ETH has sunk 19% whereas BTC is down just under 5%. Was the Merge just another classic ‘sell the news’ event?
One factor that may support this is the large exchange inflows of ETH seen before the Merge. On Sept 14th, centralized exchanges witnessed the largest net inflow of ETH since 2016, totaling nearly 1m ETH. This was the 7th largest single-day net inflow ever.
Despite the changes to token issuance brought by the Merge, Ethereum as well as the rest of crypto continues to be influenced by macroeconomic factors such as global liquidity, dollar strength, stock market returns, and central bank monetary policies.
For more on market updates, Delphi members can read our latest Market Insights report here.

⚡ With The Merge In The Rear View, What’s Next?

Last week, we made the following observation about BTC market structure and market psychology in our Wake Me Up When September Ends report.
- “Over the last 3-months, we have seen risk appetite return to crypto markets as risk assets rallied across the board. Remember, at some point, buyers become future sellers… BTC now finds itself desperately holding onto the lower bound of its 3-month consolidation range.”
- “This also means that almost everyone who has bought and held Bitcoin over the last 3 months (and over the last 2 years by default) is now underwater, or off-sides in their positioning to some degree. Should prices continue to move against the majority of market participants, positions will need to unwind.”
Now that we have seen a continuation of deteriorating macroeconomic data, BTC has all but given back any price gains that it has made since June. BTC is at a very crucial point with regard to market structure, and again we pose the question; how many more times will this $19k-20k level hold? Remember, the more time support and resistance are tested, the weaker they tend to become.
Revisiting our volume profile analysis can help gauge the market psychology with regard to overall positioning. With BTC currently trading at around $19k, the majority of transactions (70-80%+) have occurred above the current BTC price.
Due to the inherent long-biased nature of markets, this means that the vast majority of long positions taken over this timeframe have transacted at higher prices than we are currently trading at. This can act as additional fuel if prices continue to move against these participants.
BTC Key Levels:
- Key Support: Current Price/$19k-$20k. Should BTC lose these levels, there is not much in the way of high or low timeframe market structure to act as support. The likely levels where buyers would be tempted to step in are around $14k-$16k, and $9k-$12k below that.
- Key Resistance 2: $20.8k-$21k. If BTC can hold the current support levels, there will likely be room towards the midpoint of the range.

ETH Key Levels:
- Support Level 1: $1.4k-$1.5k. Should ETH lose these levels, there is not much in the way of high or low timeframe market structure to act as support. The likely levels where buyers would be tempted to step in are around the midline of range 2 at $1.2k-$1.3k. If the range 2 midline support fails, a test of the lows in June may be in order.
- Resistance Level 1: $1.7k-$1.8k. If ETH can push through these levels, there will likely be room to move towards the $2k zone.
For more on this, Delphi members can read our latest Market Insights report here.

🐣 Notable Tweets

ETH Decentralization After The Merge

1/ THE $ETH MERGE IS HERE!

Ethereum has successfully merged from Proof-Of-Work to Proof-Of-Stake, but what does this mean?

POW vs. POS, a thread on the decentralization of Ethereum 🧵

— Delphi Digital (@Delphi_Digital) Sept 15, 2022

Trader Extracts $500k Profit on GMX

1/ quick thread on the GMX “exploit” last night

having sat on crypto dealing desks for many years, I know that offering liquidity to savvy traders is a painful but necessary part of the game

GLP holders learned that same lesson last night!

— Joshua Lim (@joshua_j_lim) Sept 18, 2022