After the successful Bellatrix upgrade on the Ethereum network, the price of ETH has taken a massive nosedive. This has caused a great deal of concern among investors who wonder what is happening. The drop in prices could be an indication that there are serious problems with the Ethereum network that has yet to be revealed. Or, it could simply be a case of market manipulation.
Ethereum officially successfully deployed the Bellatrix hard fork on 6 September. This is the development of the premise for The Merge; the event is expected to take place in the next ten days. The Ethereum community on Twitter was full of congratulatory messages for this new network milestone.
However, founder Vitalik Buterin did not forget to share a few notes with the community surrounding the Bellatrix implementation.
Previously, Ethereum's Ropsten testnet also encountered problems during the transition between the hard fork before The Merge and the formal process of merging PoW with PoS.
Because of the nature of this setup, the official implementation time of The Merge will depend on Terminal Total Difficulty (TTD), the level of chain excitement after the Bellatrix hard fork. Therefore, it is impossible to predict the specific time accurately and can only be temporarily satisfied with the period ranging from 13-15 September.
The cryptocurrency market on September 7 unexpectedly dropped heavily, with major coins like BTC and ETH losing more than 6% of their value.
At around 00:00 AM on 7 September, the world's largest cryptocurrency, Bitcoin (BTC), suddenly recorded a strong sell-off candle, falling from $19,700 to $19,175. In the hours that followed, BTC continued to decline and, at one point, dropped to $18,649 – the lowest value since 30 June.
The Bitcoin candle on 6 September also closed below $19,000, something that hasn't happened in the past two months, showing an alarming reversal of the market's No. 1 cryptocurrency.
Similarly, Ethereum (ETH) also had unforgettable hours when it fell more than 7% in the past 24 hours, from $1,662 to $ 1,521.
Ethereum, on the evening of September 6, just successfully performed the Bellatrix hard fork, the first part of The Merge – the most important upgrade in the history of this coin. After about a week, expected on September 13, Ethereum will conduct a hard fork of Paris to officially merge the two blockchains and switch to using Proof-of-Stake.
The drop of other major altcoins is also between 5%-15% compared to 24 hours ago.
According to liquidation data, in the last 12 hours, nearly $300 million of derivative orders have been burned, accounting for mainly BTC, ETH, and Ethereum Classic (ETC) coins – altcoins that have grown enormously in the past time by surfing the waves of The Merge.
The percentage of long orders being burned accounted for 84%. Even so, what is behind the latest dump in the crypto market is unclear. This is perhaps one more example that September is often an "unfortunate" time for Bitcoin and the market.
BTC often has sharp drops in September every year because of events called " Black Swan." Coincidentally, on this day last year (7 September 2021), Bitcoin experienced a "terrible" sell-off of nearly $10,000 after El Salvador officially recognized BTC as a legal currency.
Having established himself as one of the most influential people in crypto, it's no surprise that Adam Cochran has some insights on why Ethereum prices are crashing. He thinks that Aave's decision to pause Ethereum markets caused platforms like Instadapp to lose stETH/ETH pools. According to him, the Ethereum low likelihood increases as trade unwinds.
The Federal Reserve has been a major player in the crypto space, with many experts predicting that it will continue its hawkish stance on tackling inflation.
The cryptocurrency investors are eagerly awaiting the 13 September Consumer Price Index report. The merge will also be completed around the same date. Ethereum is expected to be impacted by dual factors affecting the price.
Disclaimer: The author's comments and recommendations are solely for educational and informative purposes. They do not represent any financial or investment advice. Always DYOR (do your own research)