The observed drop in the price of Ethereum today aligns with the predictions of some experts and investors after the announcement of the merger. Many were pessimistic despite the media hype triggered by the project’s development team. Some investors have decided to play it safe to avoid the scenario that seemed to be emerging.
When the network switchover took effect, ETH dropped below the support level. This prompted several investors to pull their holdings from the network, further sinking Ether’s numbers. Other factors influenced the price of ETH to maintain the downward trend. The announcement of a future interest rate hike by the Fed played a major role in the volatility of altcoin values.
Analysts put ETH’s investment drop at $15.4 million. At the same time, there is an increase in investments on BTC of around 17.4 million. This suggests that investors who withdrew their investments from Ethereum would have invested them in Bitcoin.
Ethereum price fell gradually
Analyzing the price of ETH for a few months, we can see that its price has gradually dropped from $1,800 to $1,300. This completely unusual situation reflects the fact that Ether holders have decided to sell their token holdings. While the development team and some experts hoped for a higher price after the merger, reports suggest that the decline may continue.
Indeed, some analysts believe that the price of ETH could fall another $1,000 in the event that the price were to fall all the way to $1,250. This fall is part of a negative dynamic that began before the merger and accelerated from September 15, the date of the commissioning of the new Ethereum protocol.
However, some investors remain optimistic. Despite the falling market price not working in their favor, these investors believe that ETH will recover. Speaking of which, head of digital asset research at VanEck, Matthew Sigel thinks Ether is going through a time that Bitcoin once went through when it underwent significant changes. Although he cannot give a specific date, he remains convinced that the price of ETH will stabilize.
The SEC would like to regulate proof-of-stake cryptocurrencies like securities
A few days ago, Gary Gensler, chairman of the SEC (Securities and Exchange Commission) made some startling statements. Regarding cryptocurrencies operating on proof of stake, the chairman of the SEC said in the Wall Street Journal that the possibility of subjecting staked cryptocurrencies to regulation. For him, these digital currencies are similar to securities and should therefore comply with the same type of treatment.
This statement helped to create haziness around the future of Ethereum which has just switched to a proof-of-stake protocol. The polemical statement could then dampen the aspirations of potential investors who were interested in the newly staked token.
The timing of Gensler’s statement is questionable. It comes just a few hours after the Ethereum merger took effect. There is no doubt that the transition of Ethereum has caught the attention of the SEC who want to impose regulations on the transactions of the project. This statement might have had an impact on the decline of Ethereum.
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Investors withdraw ETH holdings despite successful Ethereum merger
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