Ethereum To Delayed Merge?, ETH Price Plunges Below $1,700

Ethereum has broken below $1,700 since July 2021. At that time, the price of ETH was reacting to the downside due to increased selling pressure across the cryptocurrency market.

Related reading | TA: Ethereum maintains major support, why should ETH overcome this hurdle

This time around, Ethereum appears to be reacting to poor macroeconomic conditions, and a possible delay in its most important milestone in recent history: consolidation. The event that will complete the transition of ETH to the Proof of Stake (PoS) blockchain.

At the time of writing, Ethereum (ETH) is trading at $1,680 with a loss of 6% and 8% in the last 24 hours and 7 days, respectively. ETH is one of the worst performing companies in the top ten by market capitalization followed by Solana (SOL), Dogecoin (DOGE) and XRP.

Merge Ethereum ETH ETHUSD
ETH with slight losses on the 4 hour chart. source: ETHUSD TradingView

The Ethereum network recently saw a successful “merge” deployment on its oldest testnet, Ropsten. The community celebrated this with many claiming that a mainnet launch might be possible by August or September of this year.

Implementation of “The Merge” on Ropsten has encountered some difficulties, but ETH lead developer Tim Beiko claimed Addressed and “all fixed”.

The difficulty bomb is part of the mechanism that will enable Ethereum to transition to PoS consensus. This mechanism will gradually increase mining difficulty and prevent these actors from supporting a second ETH based on Proof of Work (PoW).

As explained by Beiko, the difficulty bomb is already having an impact on the network:

The bomb is being felt on the network, and in real life the bomb sounded faster than expected, block times being ~14sec and Arrow Glacier EIP (really composed by you) predicted “~0.1sec delay to block time by June 2022 and ~0.5sec by July 2022” .

The core ETH developers agreed to delay this mechanism for at least two months. This will give them more time to work on the transition to a consensus on selling points.

What the delayed difficulty bomb means for Ethereum

However, it appears that the core ETH developers disagree on what the delay in the difficulty bomb means for Ethereum. Ben Edgington, Principal Product Manager for Teku, an Eth2 client developed by ConsenSys, announced the following:

(…) We will push the Ethereum difficulty bomb. We say it won’t delay consolidation. I honestly wish not. Each additional week in the proof of work generates approximately one million tons of carbon dioxide emissions.

Edgington believes that developers should agree on the goal of the Merge mainnet. In this way, customers and the ETH community can “get ready”.

In this sense, Beiko responded that the event is still expected to take place sometime from August to November this year. He believes that only a “catastrophic event” can delay the “merger” this year.

Beko concluded the following regarding setting a specific date for the “merger”:

I think my point is that having a clear goal, at this point, won’t fundamentally change the speed of output from client teams, at least at the EL (Execution Layer). We have many implicit motives (devcon, bomb) in addition to intrinsic motives.

Related reading | Bitcoin Spot to Flow Derivatives Forms Historical Bullish Pattern

Despite the advance on this important ETH event, the market is already weak, and any potential signs of weakness could contribute to further selling pressure.

Leave a Comment

Your email address will not be published. Required fields are marked *