Ethereum’s recent upgrade has pushed miners out of its network. Now Ethereum 2.0 support validators who staked 32ETH and above in the network.
The community expected the merge to push the price of ETH and other cryptos up. But the reverse became the case afterward.
Related Reading: Ethereum: Can The Top Altcoin End Bitcoin’s Dominance Post Merge?
A few minutes after the event on September 15, Bitcoin lost $1K. Ethereum also lost more than $200, plummeting from $1,635 to $1471 same merge day. The next few days, on September 18, ETH price shaded off more and landed on $1335.33.
Currently, on September 21, Ethereum is trading at $1344.45. This price shows a 0.17% price decrease in 24 hours. Its hourly gain shows 0.17%, but the 7 days price movement indicates a 15.91% loss.
Ethereum Miners Dump ETH Holding Increasing Pressure
Recall that Ethereum is no longer operating with a proof of work consensus mechanism. The combination of its Beacon Chain and mainnet has rendered miners useless on the network, replacing them with validators. Even though the miners hard-forked the network creating the ETHPOW, the new network has suffered attacks and is not yet as strong and promising.
The crypto market expected a price reversal from bearish to bullish after the Ethereum upgrade. But after the event, the ETH price dropped, and the supply of ETH increased. This is not surprising because miners started disposing of their ETH coins before the merge.
Ethereum miners initially gained 13,000 ETH every day on the PoW network. But on the new PoS, validators get only 1600 ETH. Miners’ rewards dropped by 90% after the merge, which could have lowered ETH supply advantageously, pushing the price upward.
Unfortunately, Ethereum miners have dumped up to 30K ETH holding due to the price movement and the upgrade effect. This was the reason behind Ether’s price plunge from Merge day. The continuous selling added pressure on investors causing more price losses.
The current state of crypto assets is not promising. Many enthusiasts are also dumping their holdings as prices continue to plummet.
What is the Implication for Ethereum?
As miners continue dumping their ETH on the market, the price of Ether will keep falling. Even though the other factors that could have boosted the price remain positive, miners’ exit from the Ethereum market has worsened everything for ETH.
Currently, many analysts are predicting that Ethereum might drop to $750. If the miners continue selling spree coupled with the macroeconomic factors, that price level will likely occur soon.
Related Reading: Post-Merge Profit-Taking Cuts 13% Off Ethereum Ratio Against BTC
Moreover, the upcoming Feds rate hike is causing panic already. Many investors dread the announcement as it might make the market bullish or bearish. If the rate stays 75 bps, there’s no problem. But the market is in trouble if it goes high to 100 bps.
Featured image from Pixabay and chart from TradingView.com