The Feds reserves tightening and other market factors added to the volatility recorded in the valuations of ETH, BTC, and other Altcoins.
After the merge event, analysts’ predictions proved right as the ETH price crashed below the support level. As a result, several ETH investments got withdrawn, and a few additions were recorded after the merge.
According to reports, ETH investments were reduced by $15.4 million, while BTC investments increased by $17.4 million. The data could imply that investors pulled out from Ethereum to Bitcoin.
Contrary to the hype that followed the Ethereum merge, the ETH price has plummeted seriously. Earlier in September, the merge supporters believed that Ethereum would receive more investments after the merge. However, the reverse seems to be the case with the number of outflows recorded last week despite a smooth transition.
Ethereum Price Drop
Taking track of ETH price from the time before the merge till today, ETH price crashed from $1,800 to $1,300. This kind of record can only imply that several investors who previously held onto their ETH holdings have sold the same. Such a price drop is critical for Ethereum as experts have forecasted a further fall to $1,000 if ETH breaks below $1,250.
In the early hours of September 15, ETH/BTC exchange price was at 0.0817BTC on Binance. ETH value dropped hours later to 0.0746 BTC and continued to decline. ETH price didn’t only fall against BTC; ETH/USD exchange value dropped too. Although ETH holders were not pleased with the price drop, the majority are looking forward to recovery with time.
Among the optimistic investors is Matthew Sigel, head of digital assets research at VanEck. Sigel compared the post-merge ETH/USD performance to what BTC experienced after significant changes. He believes ETH would stabilize but is unsure about the time.
Proof-Of-Stake Cryptocurrencies May Be Considered Securities, Says SEC
Last week, the Chairman of the Securities and Exchange Commission, Gary Gensler, commented on staked cryptocurrencies. The regulator said in a Wall Street Journal edition that staked cryptocurrencies might be subject to regulations. He further explained that Staked crypto might be seen as securities.
Following Gensler’s comment, there may be regulatory uncertainties surrounding the new Ethereum proof-of-stake Token. As a result, corporate investors may not want to dive into ETH investment because of regulatory uncertainty.
According to the Journal, Ethereum’s proof-of-stake caught SEC’s attention. He further noted that proof-of-stake coins have contract attributes and will require SEC regulations. Gensler’s comments came out hours after the completion of the Ethereum merge.
Although Gary didn’t categorically point at Ethereum, his comment might have contributed to the fall in Ether price last week.