As expected, Ethereum has been underperforming since the much-touted merger event. This was a groundbreaking moment in the crypto industry.
Although the merger was expected to boost investor confidence, it happened at the worst possible time.
The merger occurred at an interesting point in the history of crypto. Updated September 15th – just two days after US CPI data was released.
There was a massive sell-off in the stock markets due to the Federal Reserve’s interest rate increase, which reported a 0.1% annual inflation rate, which affected the cryptocurrency market.
On the day of publication, Bitcoin is down 12.71 percent, and Ethereum is down 12.67 percent. The timing of the merger’s launch was a last-ditch effort to maintain or perhaps boost investor confidence. However, this did not actually happen.
Ethereum (ETH) price drops 21%
When all was said and done, the price of Ether fell by 21.1% compared to the 7-day moving average, as measured by CoinGecko. But Twitter user CryptoGucci disputes that.
One Twitter user explained why the recent price drop should not be alarming. The growing prevalence of Ethereum validators on the blockchain is a prime example of this.
This increase in validators could improve the overall efficiency of the Ethereum blockchain.
In addition, the state of Colorado accepts ETH as a payment method through PayPal. However, this payment method is exclusive to personal and not business PayPal accounts. However, this will undoubtedly help the adoption of the ETH ecosystem.
Is ETH recovery imminent?
Recent data indicates that ETH is experiencing a positive price rally. After a near-free drop to $1,243, the price rebounded and is currently trading between $1,221 and $1,323.
Several indicators are also depicting a strong bullish momentum. Since dropping to a critical support level, the Relative Strength Index (RSI) values have risen, indicating that investor confidence is rebounding after a horrific few days.
But are the new changes enough to stop the current interest rate increase of 0.75 per cent? As the cryptocurrency market closely reflects the broader financial environment, the recent movements may be temporary.
Wall Street indices are down a few percentage points as of this writing, and this drop could have a huge impact on the cryptocurrency market. As the third fiscal quarter draws to a close, Ethereum may see a slow but gradual comeback.
ETH total market cap at $163.7 billion on the daily chart | Source: TradingView.com Featured image from CryptoMode, Chart: TradingView.com
(The analysis represents the author's personal views and should not be construed as investment advice).