Before the Ethereum merger event, some experts and investors had expected a drop in the price of Ethereum and therefore it traded with caution. Popular analysts have referred to the consolidation as buying a rumor and selling a news scenario.
Fed tightening and other market factors added to the volatility recorded in the valuations of ETH, BTC and other Altcoins.
After the consolidation event, analyst predictions proved correct as ETH price collapsed below the support level. As a result, many ETH investments were withdrawn, and some additions were recorded after the merger.
according to ReportsETH investment decreased by $15.4 million, while BTC investment increased by $17.4 million. The data may indicate that investors are withdrawing from Ethereum to Bitcoin.
Contrary to the hype that followed the Ethereum merger, the price of ETH fell dangerously low. Earlier in September, proponents of the merger believed that Ethereum would receive more investment after the merger. However, the opposite appears to be the case with the number of outflows recorded last week despite the smooth transition.
Ethereum price drop
Tracking the price of ETH from the time before the merger until today, the price of ETH dropped from $1,800 to $1,300. This type of record can only indicate that several investors who previously held their ETH holdings sold the same thing. This drop in price is critical for Ethereum as experts have predicted a further drop to $1,000 if ETH drops below $1,250.
In the early hours of September 15, the ETH/BTC exchange rate was at 0.0817BTC on Binance. After hours, the value of ETH dropped to 0.0746 BTC and continued to decline. Not only did the price of ETH drop against BTC; The value of the ETH/USD exchange rate also declined. Although ETH holders were not satisfied with the price drop, the majority are looking to recover over time.
Among the bullish investors is Matthew Siegel, head of digital asset research at VanEck. Sigel compares the performance of ETH/USD after the merger with what BTC has seen after major changes. He believes that ETH will stabilize but is not sure when.
SEC . says
Last week, the Chairman of the Securities and Exchange Commission, Gary Gensler, commented on the cryptocurrency stack. The regulator said in a Wall Street Journal edition that the cryptocurrency stack may be subject to regulation. He further clarified that Staked cryptocurrencies may be viewed as securities.
Following Gensler’s comment, there may be regulatory skepticism surrounding the new proof of ownership of Ethereum token. As a result, corporate investors may not want to dive into an ETH investment due to regulatory uncertainty.
According to the magazine, proof of stake in Ethereum has caught the attention of the SEC. He further noted that Proof of Stake coins have contractual features and will require SEC regulations. Gensler’s comments came hours after the completion of the Ethereum merger.
Although Gary did not definitively refer to Ethereum, his comment may have contributed to the drop in the price of Ether last week.