We’re in a post-merge world, and the lessons keep arriving. The mythical Merge turned out to be a sell-thenews event for Ethereum. It was technical success. Ethereum had a 99.9% uptime. This is in line with what optimistically predicted. The asset was a victim of economic bleeding throughout the entire post-merge period. Ethereum fell behind bitcoin as a result. Bitcoin dominance has returned.
Let’s go to Arcane Research’s The Weekly UpdateFor exact statistics and numbers, please visit:
“Since the merge, Ether (ETH) is down 17% in USD and down 13% compared to BTC, with ETHBTC currently trading at 0.07. ETH has found support at 0.07 ETHBTC, which represents the average ETHBTC price over the last 365 days.”
This could be a new trend, or is it just the post-merge anxiety?
The Post-Merge Post-Mortem
For a rational analysis, let’s quote The Weekly Update:
“Ether traded idly after the merge, and volatility remained low until U.S. markets opened down. The ETH blow was related to a correlated environment to risk assets, but excess leverage from long traders contributed to exacerbating Ether’s relative underperformance versus BTC.”
And the fact of the matter is that the old adage “buy the rumor, sell the news” applies perfectly here. Fuelled by hype, Ethereum’s price ballooned before the event. It was still far away from its all-time high of around $4,8K, but $1.7K was great for the market we’re in. This asset outperformed Bitcoin and threatens its dominance. But it was way too overbought. People sold ETH after the merger, and it is currently in a downtrend. Textbook behavior that shouldn’t surprise a soul.
The chart to watch, though, is that of Ethereum’s issuance. One major difference between post-merge Ethereum’s predecessor and the current one is the fact that the new currency will be more rare. That could impact the price of Ethereum tremendously.
ETH price chart on Bittrex for the 09/21/2022 | Source: ETH/USD on TradingView.com
The State of Ethereum Forks
The expectation of forks or airdrops was one of the driving forces of the pre-merge rally. From the mess came two brand-new Ethereum forks. These were two of the biggest victims in this post-merge phase. Return to The Weekly update:
“Ether has not struggled in isolation, Ether forks have experienced severe headwinds, and both ETHW and Poloniex’s competitor fork EthereumFair (ETF) have seen more than two-thirds of their valuation slashed since launch.”
It was only natural that this brutal fight would ensue. Each fork generates something akin an airdrop. People receive the equivalent of the ETH in ETHW or ETF. This free money was quickly exchanged for hard currencies by users. And now it’s time for those forks, who the all-powerful stablecoins don’t support, to prove their worth.
A older fork, which was not affected by the merger and is still struggling to make ends meet, also made the headlines.
“Ethereum Classic has also underperformed versus ETH. Amid the merge, many miners migrated to ETC, leading ETC’s hashrate to peak at 300 TH/s. However, as the difficulty has increased in ETC, the hashrate in ETC has declined to 186 TH/s”
Some thought Ethereum Classic was going to prosper post-merge. Ethereum Classic is a Proof-Of Work blockchain. So far, they’ve been proven wrong. But we’re in the early innings and things might drastically change for old reliable Ethereum Classic.
ETHBTC Price Chart on Binance Source:| Source: Weekly Update
Conclusions
Apparently, the merge was a success but the price didn’t hear the news. We should also remember that September is a notoriously bad month for cryptocurrency in general. That, mixed with the classic “buy the rumor, sell the news” behavior have ETH against the ropes. This is it for the moment.
Charts By TradingView. Featured image by Gerd Altmann| Charts by TradingView and The Weekly Update