Ethereum’s recent upgrade pushed miners out of its network. Now supports validators with 32ETH and more at stake on the Ethereum 2.0 network.
The community expected the merger to increase the price of ETH and other cryptos. But later it was reversed.
Related Reading: Ethereum: Could Top Altcoin End Bitcoin’s Dominance Post Merger?
Minutes after the event on September 15, Bitcoin lost $1K. Ethereum also lost more than $200, falling from $1,635 to $1471 on the same day of the merger. In the next few days, on September 18th, the ETH price was over shadowed and dropped to $1335.33.
Currently, on September 21, Ethereum is trading at $1344.45. This price shows a price decrease of 0.17% in 24 hours. Its hourly gain is showing 0.17%, while 7 days price movement indicates loss of 15.91%.
Ethereum Miners Dump ETH Holding Increases Stress
Remember that Ethereum no longer works with a proof of work consensus mechanism. The combination of its beacon chain and mainnet has made miners useless in the network, replacing them with validators. Although miners hard-forked the network creating ETHPOW, the new network suffered attacks and is still not strong and promising.
The crypto market expected a price reversal from bearish to bullish after the Ethereum upgrade. But after the event, the price of ETH fell and the supply of ETH increased. This is not surprising because miners started disposing of their ETH coins before the merge.
Ethereum miners initially earned 13,000 ETH daily on the PoW network. But in the new PoS, validators only get 1600 ETH. Miners’ rewards dropped by 90% after the merger, which could conveniently reduce the supply of ETH and push the price up.
Unfortunately, Ethereum miners dumped 30K ETH holdings due to the price movement and upgrade effect. This is the reason behind the price drop of Ether since the day of the merger. Continued selling increased pressure on investors leading to further price losses.
The current state of crypto assets is not promising. Many enthusiasts are also dumping their holdings as prices continue to fall.
What are the implications for Ethereum?
As miners continue to dump their ETH on the market, the price of Ether will continue to fall. While other factors that could have boosted the price remain positive, the exodus of miners from the Ethereum market has made things worse for ETH.
Currently, many analysts are predicting that Ethereum may drop to $750. If miners continue to sell alongside macroeconomic factors, that price level could happen soon.
Related Reading: Post-Merge Profit-Taking Cuts BTC vs. Ethereum Ratio by 13%
Furthermore, the impending Fed rate hike is already causing panic. Many investors fear the announcement because it can make the market bullish or bearish. If the rate is 75 bps, no problem. But if it rises to 100 bps, the market will suffer.
Featured image from Pixabay and chart from TradingView.com