Top Crypto News Today: In the first few days of September, Ethereum underwent the most anticipated network upgrade, the Merge. The ETH chain shifted from Proof-of-Work to Proof-of-Chain after the mainnet was merged with the Ethereum Beacon Chain. Until then, the Beacon chain was running parallel to the mainnet, which was merged during the Ethereum Merge event.
Much before the transition, the second-largest crypto had gained enough bullish momentum that it elevated the price by more than 25% to reach close to $1800. Woefully, the market sentiments flipped and the price dropped below $1500 on the day of the merge, which is being continued until press time. The ETH price, with the recent price action, has sliced down from a bullish structure and flashes bearish signals ahead.
Therefore, the ETH price has been adversely impacted by the Merge as the token has recorded a loss of more than 20% since then. Moreover, the market capitalization also suffered a huge slump in the same period.
From the above chart, it is quite evident that the merge has failed to induce the required bullish momentum within the token. While some market participants believed that Ethereum may outperform Bitcoin soon after the merger, the crypto appears to have been following the star crypto to a large extent.
Additional Read: Ethereum Price Prediction
What Went Wrong Post the Ethereum Merge?
The ETH price was expected to rise sharply as the token was supposed to become deflatinary post the Ethereum merge. However, despite a reduction of the supply of the new token by nearly 90%, the price remained unaffected as it continued to deplete. Regardless of whether the transition was successful or not, some of the major pointers indicate a failure in uplifting the price.
ETH believed to be more centralized
Ever since the Phase 0 of ETH2.0 was announced, the market participants have constantly staked their ETH to trigger the operations. Soon the levels surpassed the required limit as the rate of staked ETH marked ATH every new day. Presently, a couple of addresses hold more than 70% of the staked ETH, which now becomes more prominent as the chain works on PoS.
External factors impacting crypto space
Global factors are constantly hampering the Bitcoin and the ETH price rallies, which in-turn impact the other cryptos as well, like the rise in the basis points to curb inflation, the CPI rates, and unemployment rates.
Less Liquidity Compelling the Price to Remain less Volatile
Due to the external factors, the inflow of liquidity has been heavily restricted, due to which the price continues to consolidate.
Shift of Focus of the Traders
As the top cryptos inculcate a monotonous rally, the traders now may have found out other option to extract profits
Collectively, the suspension of Ethereum mining and the inclusion of staking have not displayed the required results with the token’s value. The market conditions may also have impacted to a large extent. Therefore, the real impact could take a longer time to manifest the outcome.
Additional Read: EtheruemPoW Price Prediction