Main navigation

Here's Why Ethereum's Price Crashed So Low Since Merge: Details

Sun, 10/16/2022 - 15:07
article image
Tomiwabold Olajide
Ethereum price is at $1,284, down roughly 13% from day of Merge
Here's Why Ethereum's Price Crashed So Low Since Merge: Details
Cover image via

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Read U.TODAY on
Google News

According to the onchain analytics firm Santiment, Ethereum large holders, namely shark and whale addresses having up to 1 million ETH, have dumped $4.2 billion worth of ETH, which is 3.3 million coins in the last five weeks. The Ethereum Merge occurred on Sept. 15, to the joy of the community.

The excitement around the Merge, which finalized the network's transition to proof of stake, boosted the price of Ethereum and that of related cryptocurrencies, including Ethereum Classic. 

However, the savage crypto bear market has already erased the majority of these gains. The price of Ethereum itself is at $1,284, down roughly 13% from the day of the Merge. The massive dump of Ethereum addresses may now be considered a major contributing element to the decline.

Ethereum Traders Believe ETH Price Might Reach $5,000 Ahead of Merge

Ahead of the much-publicized event, the onchain analytics firm Glassnode pointed out the potential for a "sell-the-news" drop resulting after the Merge, drawn from futures and options backwardation after September.

It noted that the shape and scale of the September to October volatility smile indicated a comparatively decreased demand for ETH exposure through options after the Merge event, which showed that traders had set themselves up for the Merge to be a "buy the rumor, sell the news" kind of event.

This was reflected in futures traders pricing ETH at a discount post-Merge and willing to pay a premium for downside protection.

Ethereum fork ETHW likewise fell to lows

To continue mining after the Ethereum blockchain abandoned it and successfully made the long-awaited switch to proof of stake in the middle of September, miners created a rival fork dubbed EthereumPoW (ETHW).

Alongside the drop in Ethereum price, ETHW is down 34.8% for the week at $7.30 and a staggering 87.5% from its all-time high of $58.54 on Sept. 3, according to CoinGecko data.

article image
About the author

Tomiwabold is a cryptocurrency analyst and an experienced technical analyst. He pays close attention to cryptocurrency research, conducting comprehensive price analysis and exchanging predictions of estimated market trends. Tomiwabold earned his degree at the University of Lagos.