Ethereum price came under intense pressure in the past few days as the hype surrounding Merge faded. The ETH token crashed to a low of $1,302, which was the lowest level since July 16th. It has fallen by more than 36% from the highest level in August, giving it a market cap of over $159 million.
Why did ETH crash after merge?
Ethereum price has been under pressure in the past few days even after the successful merge event. This merge transitioned Ethereum from a proof-of-work (PoW) network into a proof-of-stake (PoS) platform. PoS is usually better than PoW because it does not involve doing hardware mining. Instead, it focuses on validators to confirm transactions.
There are three main reasons why Ethereum price collapsed after the Merge event. First, it declined because of regulatory concerns. In a statement last week, SEC’s Gary Gensler sounded alarm over the changes made by Ethereum network. He warned that ETH may soon be classified as a security because of the staking element. Therefore, there are concerns about what the SEC will do.
Second, ETH price dropped because of a situation known as ‘buy the rumor, sell the news’. It happens when an asset’s price rises ahead of a major event and then slides when it happens.
Third, Ethereum price struggled as more details about the network emerged. On-chain data showed that 64% of all staked Ethereum was just controlled by five entities like Lido, Unlabelled, Coinbase, and Kraken. Other big stakers are Binance, Staked, and Bitcoin Suisse. As such, the nine biggest stakers control 90% of total supply. Finally, ETH price dropped because of the upcoming Fed decision.
Ethereum price prediction
The daily chart shows that Ethereum price continued falling on Monday morning. As it dropped, it managed to move below the 25-day and 50-day moving averages and the minor support level at $1,423. The Relative Strength Index (RSI) moved below the neutral level of 50 while the Awesome Oscillator has moved below the neutral level.
Therefore, the coin will likely continue falling as sellers target the next key support level at $1,000. A move above the resistance point at $1,423 will invalidate the bearish view.
