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As expected, Ethereum has been doing poorly since the much-touted Merge event. This was a groundbreaking moment for the crypto industry.
Although the Merge was anticipated to boost investor confidence, it occurred at the worst possible time.
The Merge took place at an interesting point in crypto history. The update went up on September 15—just two days after the United States CPI data was made public.
There was a widespread selloff in the stock markets because of the Federal Reserve’s interest rate increase, reporting its annual inflation rate hike of 0.1%, and affecting the cryptocurrency market.
On the day of publication, Bitcoin dropped 12.71 percent, and Ethereum fell 12.67 percent. The timing of the Merge’s launch was a last-ditch effort to maintain or perhaps boost investors’ trust. However, that did not actually occur.
Ethereum (ETH) Price Down 21%
When everything was said and done, the Ether’s price had dropped by 21.1% compared to its 7-day moving average, as measured by CoinGecko. But @CryptoGucci, a Twitter user, disputes this.
One Twitter user explained why the recent price decline shouldn’t be worrying. The increasing prevalence of Ethereum validators on the blockchain is a prime example.
This increase in validators can improve the Ethereum blockchain’s overall efficiency.
Additionally, the state of Colorado has accepted ETH as a payment method through PayPal. However, this payment method is exclusive to personal PayPal accounts and not commercial ones. Nonetheless, this will undoubtedly aid the adoption of the ETH ecosystem.
Is An ETH Recovery Imminent?
Recent data indicate that ETH is witnessing a positive price increase. After a near-freefall to $1,243, the price has rebounded and is currently trading between $1,221 and $1,323.
Multiple indicators also depict a strengthening bullish momentum. Since the decline to the critical support level, stochastic relative strength index (RSI) values have risen, indicating that investor confidence is rebounding after a dreadful few days.
But are new changes sufficient to halt the current 0.75 percent interest rate increase? As the cryptocurrency market closely mirrors the broader financial environment, the recent movements may be temporary.
Wall Street’s indices have declined by a few percentage points as of this writing, and this decline can have a significant impact on the cryptocurrency market. As the third fiscal quarter draws to a close, Ethereum may experience a slow but gradual comeback.
ETH total market cap at $163.7 billion on the daily chart | Source: TradingView.com
Featured image from CryptoMode, Chart: TradingView.com
(The analysis represents the author’s personal views and should not be construed as investment advice).