ETH has dropped by more than 25% in the last seven days. At the time of writing, the ethereum price is trading at $1,295, dropping more than 10% in the last 24 hours.
Ethereum is not the only cryptocurrency struggling from the slowdown. Bitcoin price has dropped below $18,500, plummeting more than 7% in the last 24 hours. However, an expert believes that the drop in Ethereum price is a hoax.
Nevertheless, the ETH/BTC ratio dropped by around 15% in the days following the merger. This is despite the fact that Bitcoin's dominance is at an all-time low.
How Ethereum Drop Is FUD
According to Vivek Ventures, significant crypto and Ethereum influencer, Ethereum's price action is "short-term noise." He believes Bitcoin maximalists are currently spreading misinformation regarding Ethereum and the merge.
Vivek claims that after the merge, Ethereum issuance has dropped by 95%. This indicates that Ethereum needs to issue 95% fewer tokens while maintaining the same level of security.
Ethereum released less than 3000 tokens in the three days after the merge. It would have released over 40,000 tokens in the Proof-of-work mechanism.
Vivek also explains the difference in selling pressure triggered by the merge's shift in the consensus mechanism. The current Proof-of-Stake model has far less selling pressure than the previous Proof-of-Work model. For the next 6 to 12 months, Ethereum validators will be unable to sell their block rewards. As a result, the selling pressure on Ethereum is almost zero right now.
However, if the price of ETH remains constant at $1400, the total selling pressure over the PoW era would be $7 billion. Vivek also indicates that Ethereum's gas expenses are presently higher than 15 gwei. As a result of the merge's deflationary impact, Ethereum is under buying pressure.
Bitcoin Vs. Ethereum Narrative War
Since the merge, the Bitcoin and Ethereum communities have been at odds. Twitter CEO Jack Dorsey said that the Bitcoin community should brace itself for a narrative war. Bitcoin currently operates in the Proof-of-work mode, which has been criticized for its excessive energy consumption. On the other hand, Ethereum’s PoS has potential centralization concerns.
