Ethereum is outperforming the broader cryptocurrency market as the highly anticipated Merge approaches, but the bigger picture is still largely bearish.

Ether (ETH) has gained a whopping 48% over the past seven days, outperforming its big brother Bitcoin (BTC), which has only managed to achieve 19% in the same period. It’s also up 66% from its market cycle bottom of $918 on June 19, reaching its current price of $1549.

However, the current ETH rally could be a bull trap with the macroeconomic clouds darkening. A bull trap is a signal indicating that a declining trend in a crypto asset has reversed and is heading upward when it will actually continue downward.

The primary driver of recent momentum for the asset has been linked to announcements regarding its final switch to proof-of-stake (PoS), which has been slated for Sept. 19.

The Merge will reduce the network’s energy consumption by more than 99%. However, it will not necessarily reduce transaction fees significantly, as this will occur when scaling takes place via sharding, which is expected sometime next year.

On Tuesday, a Coinbase report on the Merge explained that the next major step and last dress rehearsal is the Goerli testnet Merge, which has been planned for August 11.

Goerli is the most battle-tested Ethereum environment with the most user activity and the closest simulation of the real thing.

While the major upgrade is the fundamental driver of current ETH market sentiment, the asset is still trading down 68% from its November 2021 all-time high.

There have also been concerns that a significant amount of ETH may flood the market after the Merge and its release from its staking smart contracts.

However, director of research at 21Shares, Eliézer Ndinga, told Cointelegraph that this is unlikely to happen:

“The withdrawals of Ether won’t occur until 6-12 months post Merge after the Shanghai upgrade. The withdrawals will be limited to six validators every epoch or ~ 6 minutes to avoid bank runs and keep the network secure.”

Related: Ethereum devs confirm the perpetual date for The Merge

According to a recent survey by Finder, conducted before the most recent rally, said there is still a lot of negative sentiment regarding short-term Ether prices. 

The panel of 54 industry experts polled thought ETH would be worth $1,711 by the end of 2022, climbing to $5,739 by 2025, before hitting $14,412 by 2030. However, they also thought it would dump to $675 before the year was out.

Finder said there are a couple of macroeconomic factors that could cause this retreat. The United States Federal Reserve is expected to hike rates again by 75 basis points during their July 26-27 meeting, which is generally bearish for crypto markets. If Bitcoin (BTC) takes a dive, Ether is sure to follow.

Additionally, the U.S. Bureau of Economic Analysis (BEA) will release its advance estimate of second-quarter GDP growth on July 28. Another negative quarter, which is expected, will mean that the country is in a technical recession, which is also very bad for risk-on assets such as Ether.