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Why Has Ethereum Dropped Despite the Merge?

08 Sep 2022 By: Rohit Khandelwal
Why Has Ethereum Dro

On the Ethereum Beacon chain, the Bellatrix upgrade went live yesterday. It signalled the beginning of the Ethereum merging, which will come to a close with the upgrading of Paris. 

Despite the excitement surrounding the merger, the price of Ethereum has decreased by almost 8%. The price is presently $1,510.

The Ethereum merger is expected to have a significant positive impact for both ETH and cryptocurrencies in general. Investors are concerned about the price decline.

Bellatrix's Aftermath

Bellatrix's update became operational yesterday. The fusion starts with the Bellatrix upgrade. Additionally, it enables the creation of Beacon blocks by the validators. One of these blocks will also include the merge's programming code.

Following the Bellatrix upgrade, the Ethereum network's participation rate decreased. The failure of some nodes to upgrade their clients, in the opinion of experts, is what caused the fall. As more validators upgrade their nodes for the Bellatrix upgrade, they predict that participation will rise.

The fact that Ethereum's missed blocks rate increased by 1700% following the upgrade is a more concerning development. The Ethereum developer team will keep a careful eye on the issue because the integration is only one week away.

Why Prices of Ethereum Are Declining

Crypto influencer and partner at Cinneamhain Ventures Adam Cochran thinks there may be further causes for the decline in Ethereum pricing. He thinks that sites like Instadapp relaxed in stETH/ETH pools as a result of Aave's decision to stop Ethereum markets. He thinks that trade unwinding may lead to the next Ethereum lows.

It does not help Ethereum that the macroeconomic forces are present. The Fed is anticipated to maintain its aggressive approach to combating inflation. The dollar's continued climb has caused a severe downturn in both the cryptocurrency and stock markets.

The CPI release on September 13th will be eagerly anticipated by cryptocurrency investors. Additionally, the merge will be finished on or about the same day. The two elements will significantly affect the price of Ethereum.