A closely tracked crypto trader says there are two key factors powering the current rally in the cryptocurrency markets.

Earlier this month, pseudonymous analyst Light told his 167,100 Twitter followers that after an abysmal first half of the year, crypto bulls were in a position to inspire a rally in the markets but lacked the narrative to do so.

“The market now lacks a viable schelling point narrative. Yet its desire for one is palpable. It wants to make back what it lost. We will suspend disbelief in an effort to do so once a vehicle emerges to carry this latent desire. In the wreckage are nascent roots.”

Now, Light says the announcement of Ethereum’s (ETH) schedule for The Merge along with a relatively quiet macro backdrop are giving crypto bulls the energy to ignite rallies across the markets.

“If the last few days of price action didn’t make it obvious, The Merge has filled the narrative void. Macro calming opened space for a return to asset specific drivers.”

On July 15th, Ethereum developers revealed the timeline for ETH’s massive upgrade that will enable the leading smart contract platform to solve its network scalability issues. At time of writing, Ethereum is swapping hands for $1,520, up over 70% from its 2022 low of around $880.

Light adds that Ethereum’s strong performance over the last week is motivating traders to take on more risk, which he notes could lead to more rallies as others try to catch up or rotate their capital.

“Shorts had days to get out on BTC. Zero reason to be short it when ETH did what it did. A large asset in the ecosystem ripping 40% stokes risk-seeking behavior everywhere else. It makes people consider that assets can in fact go up in price. It leads to catch-up/rotational flows.”

At time of writing, Bitcoin (BTC) is changing hands for $23,147, up 4.50% in the past day and over 30% from its yearly low of around $17,600.

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