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

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

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

According to on-chain analytics firm Santiment, major Ethereum holders i.e. Shark and whale addresses with up to 1 million ETH, dumped $4.2 billion worth of ETH in the last five weeks, equivalent to 3.3 million coins. The Ethereum merger took place on September 15th, to the delight of the community.

Fusion surrounding the merger that completed the network’s transition to proof-of-stake has propelled the price of Ethereum and related cryptocurrencies, including Ethereum Classic.

However, the wild cryptocurrency bear market has already wiped out most of these gains. Ethereum itself is priced at $1,284, about 13% lower than on the day of the merger. Ethereum’s massive address dump can now be seen as one of the main contributors to the decline.

Ahead of the highly publicized event, on-chain analytics firm Glassnode pointed to the potential for a resulting post-merger sell-the-news drop due to futures and options rescheduling post-September.

Noted that the shape and magnitude of the September-October volatility smile indicates comparatively lower demand for ETH exposure via options after the merger event, showing that traders had prepared for the merger. It was a “buying of rumours” sell the news. “This was reflected in futures traders pricing ETH at a post-merger discount and willing to pay a premium for downside protection.

Ethereum fork ETHW likewise fell to lows

To continue mining after the Ethereum blockchain gave up and successfully made the long-awaited move to proof-of-stake in mid-September, miners created a competing fork called EthereumPoW (ETHW). Coupled with Ethereum’s price drop, ETHW is down 34.8% over the week to $7.30 and a staggering 87.5% from its all-time high of $58.54 on September 3, according to data from CoinGecko.

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