Ethereum, the top alternative currency, has dropped by 25% during the past week. Even the much-touted Merge stories failed to deliver on their “expected” charisma. Despite the dramatic change in the dynamics of emission, the incident triggered a’sell the news’ scenario in the price of ETH. The question remains of whether or not the second largest digital coin could suffer from retail and institutional reaction.
After years of anticipation, Ethereum finally made the switch to the PoS system, but the $ETH price struggled. The price of Ethereum has dropped by about 25% during the past week. Many people thought the highly anticipated event had become a “buy the rumors, sell the news” catalyst because of this.
Does the Ethereum Merge represent a one-off opportunity to “sell the news”? The numbers begged to differ. After the Merge date was announced at the beginning of this year, market participants bought ETH and then sold it when the event occurred. As a result, gaining advantages. Bitcoin, on the other hand, lost only 5% of its value. Therefore, Ethereum was not particularly affected by the general crypto market correction story.
Also, the leading crypto had trouble bouncing back from the Terra fiasco, which dealt a severe blow to its market value. Despite smart contract upsides for Ethereum since 2020, growth was halted in May after the collapse of Terra. Ether in smart contracts peaked at 30% on May 9 (when Terra collapsed).
While the protocol’s revenue was falling, the cryptocurrency market was in a bear phase, L2s volume was increasing, and the protocol was being updated to improve gas efficiency. Ethereum’s’smart’ contracts supply, also, reiteratively cited analogous instances.
Can Ethereum really be that bad?
At the time of publication, Ethereum had lost another 4% in the last day, dropping to $1,267.75. But some characteristics persist in spite of everything. To begin, there was a major shift in the daily supply of Ether.
Market supply of newly created ETH has plummeted by almost 90%, according to data, compared to levels seen during the proof-of-work era. The release of ETH has decreased significantly, according to the ultrasound data. If interest in cryptocurrencies remains high or perhaps increases in the following trading sessions, this might have a significant effect on prices.
In light of the Merge update, what are your thoughts on Ethereum’s current trajectory? Below is a comment box where you may express your opinion.