We’re in a post-merge world, and the teachings preserve arriving. As it seems, the legendary Merge was a sell-the-news occasion for Ethereum. Technically, the occasion was a hit and Ethereum stored a 100% uptime as optimistically predicted. Economically, the asset has been bleeding for the entire post-merge season. As a consequence, Ethereum misplaced floor in opposition to bitcoin, and bitcoin dominance is again up.
Let’s go to Arcane Research’s The Weekly Update for the precise stats and numbers:
“Since the merge, Ether (ETH) is down 17% in USD and down 13% compared to BTC, with ETHBTC currently trading at 0.07. ETH has found support at 0.07 ETHBTC, which represents the average ETHBTC price over the last 365 days.”
Will this turn out to be a bent or are these simply the post-merge jitters?
The Post-Merge Post-Mortem
For a rational evaluation, let’s quote The Weekly Update:
“Ether traded idly after the merge, and volatility remained low until U.S. markets opened down. The ETH blow was related to a correlated environment to risk assets, but excess leverage from long traders contributed to exacerbating Ether’s relative underperformance versus BTC.”
And the actual fact of the matter is that the previous adage “buy the rumor, sell the news” applies completely right here. Fuelled by hype, Ethereum’s value ballooned earlier than the occasion. It was nonetheless far-off from its all-time excessive of round $4,8K, however $1.7K was nice for the market we’re in. The asset outperformed bitcoin and threatened its dominance. It was overbought, although. Post-merge, individuals bought and ETH is now in a downtrend. Textbook habits that shouldn’t shock a soul.
The chart to look at, although, is that of Ethereum’s issuance. The primary distinction between the post-merge Ethereum and its predecessor is that the brand new coin might be rather more scarce. And that would have an effect on the value tremendously.
ETH value chart for 09/21/2022 on Bittrex | Source: ETH/USD on TradingView.com
State Of The Ethereum Forks
One of the drivers of the pre-merge rally was the expectation that there could be forks and there could be airdrops. Two model new Ethereum forks emerged from the messy state of affairs. Those two suffered probably the most throughout this post-merge interval. Back to The Weekly Update:
“Ether has not struggled in isolation, Ether forks have experienced severe headwinds, and both ETHW and Poloniex’s competitor fork EthereumFair (ETF) have seen more than two-thirds of their valuation slashed since launch.”
This brutal smackdown was to be anticipated. All forks generate one thing akin to an airdrop, as individuals acquired the equal to the ETH that they had in ETHW and ETF. Users exchanged that free cash for more durable currencies fairly quick. And now it’s time for these forks, who the omnipotent stablecoins don’t help, to show their price.
An older fork was additionally within the information due to the merge and has been struggling as a lot as its cousins.
“Ethereum Classic has also underperformed versus ETH. Amid the merge, many miners migrated to ETC, leading ETC’s hashrate to peak at 300 TH/s. However, as the difficulty has increased in ETC, the hashrate in ETC has declined to 186 TH/s”
Some individuals thought that Ethereum Classic, who stays a Proof-Of-Work blockchain, was going to thrive post-merge. So far, they’ve been confirmed fallacious. But we’re within the early innings and issues may drastically change for previous dependable Ethereum Classic.
ETHBTC value chart on Binance | Source: The Weekly Update
Conclusions
Apparently, the merge was a hit however the value didn’t hear the information. However, we must always take note of that September is often a foul month for cryptocurrencies normally. That, blended with the basic “buy the rumor, sell the news” habits have ETH in opposition to the ropes. For now.
Featured Image by Gerd Altmann from Pixabay | Charts by TradingView and The Weekly Update
