Since July 2021, Ethereum has fallen below $1700 At that time, ETH’s price was reacting to the downside due to an increase in selling pressure across the crypto market.
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Ethereum appears to be responding to the current poor macroeconomic environment and possibly a delay in The Merge, its most significant milestone in recent times. The event that will complete ETH’s transition to a Proof-of-Stake (PoS) blockchain.
Ethereum (ETH), trades at $1680 as of the writing. There has been a 6% loss and 8% in the past 24-hours and seven days, respectively. ETH ranks among the 10 worst performing top-10 market capitals, followed closely by Dogecoin(DOGE), XRP and Solana.
The Ethereum network recently saw the successful deployment of “The Merge” on its oldest testnet, Ropsten. The community celebrated this success, with some claiming that a mainnet launch might be possible in August or September of this year.
“The Merge” implementation on Ropsten saw some difficulties, but ETH core developer Tim Beiko claimed they were addressed and “all fixed”.
Difficulty Bomb: This is part of the mechanism to allow Ethereum to move to PoS consensus. This will make mining more difficult and stop these actors from supporting a second ETH based in Proof-of-Work.
Beiko explained that the Difficulty Bomb is already having an influence on the network.
The bomb is being felt on the network, and, in true bomb fashion, it appeared quicker than predicted Block times are ~14s and the Arrow Glacier EIP (authored by yours truly) predicted “a ~0.1 second delay to block time by June 2022 and a ~0.5 second delay by July 2022.
The ETH core development team agreed that the delay of this mechanism should be at most 2 months. They will have more time to complete the PoS migration.
The Difficulty Bomb Delay Means for Ethereum
The ETH core developers disagree about what the Difficulty bomb delay means for Ethereum. The following was announced by Ben Edgington (Lead Product Manager, Teku), an Eth2 client created and maintained by ConsenSys:
(…) we will push back the Ethereum difficulty bomb. We say it won’t delay the Merge. We hope so. Each extra week of PoW results in close to 1,000,000 tonnes more CO2 emissions.
Edgington thinks developers need to agree on a Merge target. In that way, clients and the ETH community can “prepare”.
Beiko responded that “The Merge” is expected to occur sometime between August and November of this year. He believes only a “catastrophic event” could delay “The Merge” this year.
Beiko concluded the following on setting a specific date for “The Merge”:
I guess my view is that having an explicit target, at this point, basically wouldn’t change the speed of output from client teams, at least on the EL (Execution Layer). There are many implicit targets (devcon and bomb), as well intrinsic motivation.
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Despite all the positive developments in the important ETH event the market is still soft. Any signs of weakness may contribute to an increase selling pressure.