Despite Successful Merge, Ethereum Price Drop Post Merge
Despite Successful Merge, Ethereum Price Drop Post Merge.
The Merge, a most highly-anticipated event in cryptocurrency aiming to reduce energy consumption, ran smoothly yesterday. Ethereum successfully moved from proof-of-work to proof-of-stake.
Ethereum’s Price Fell Down
Regardless of the successful Merge, ETH declined in price on September 15. The price of Ether (ETH) fell 9% on above-average volume, falling mildly after the Merge. Price declines continued for the remainder of the day.
A 6% drop occurred around 14:00 UTC during a spike in volume, but the dip is not linked to the Merge. After the Merge’s success, ether’s implied volatility (IV) decreased sharply as fears of problems were dispelled.
Related: Experts Observe on the Future of Ethereum After The Merge
The Price Decline Seems Not Related to the Merge’s Impact
Despite one of the most crucial events in cryptocurrency history going smoothly, ether fell sharply on Thursday.
The close to 9% price decline appears to have nothing to do with the Merge. Instead, there is likely to be a “sell the fact” movement following the unwinding of an “Ethereum Merge” trade.
The Merge is likely to affect long-term supply of ether and the efficiency of the blockchain itself, rather than act as a catalyst for price movement in the short term.
Ethereum’s 9% decline on Thursday marks the fourth decline of more than 8% in the last 30 days, with the largest drop occurring on Aug. 19 (12.89%).
Related: Pre-Merge Ether Exchange Inflows Reaches $1.2 billion
Trading volume was above its 20-day moving average on each of the previous occasions, just as it is today.
Technically, ETH’s hourly chart displays that price started to rebound after 14:00 UTC return after dropping below $1,500.
Funding rates for ETH, which represent payments between sellers and buyers of futures contracts, remain negative according to on-chain data.
In a negative rate environment, sellers are likely to drive the market since they pay buyers (longs) an inordinate premium for remaining short.
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