December 8, 2022


Ethereum, the largest altcoin, has fallen by 25% over the past seven days. The much-touted merger narratives clearly fail to achieve their “expected” charm. Despite the fundamental change in the emissions dynamics, the event led to the development of “selling news” in the price.

Now, the question is – from institutional backlash to retail, could things go wrong for the second largest cryptocurrency?

Graffiti on the wall

Ethereum successfully shipped the merger after years of anticipation, but the price of ETH has plummeted. The second cryptocurrency has lost 25% of its market value over the past week.

This led many to believe that the event turned into what the trades describe as “rumour buying, selling news.”

Source: Delphi Digital

Was the merger just another classic “selling the news” event? The chart didn’t scream YES! Investors bought ETH when the merger date was announced earlier this year and sold it when the actual event occurred. Please, reap the benefits.

In comparison, the price of Bitcoin has fallen by only 5%. Thus, listing the general crypto patch has little basis for ETH. In fact, the major token is still finding it difficult to move on from the Terra fiasco that severely hurt its price.

While ETH in smart contracts has been on an uptrend since 2020, the crash of Terra in May halted that growth, according to a report.

As of May 9, when Terra crashed, the total percentage of ETH in smart contracts peaked at 30%. Meanwhile, protocol revenue has been reduced by a combination of a falling cryptocurrency market, an increase in L2s volume, and an upgrade in gas efficiency protocol contracts.

Even the introduction of ETH into smart contracts repeated the same scenario.

Everything lost?

At the time of writing, Ethereum has slipped below the $1.4K mark, experiencing a fresh 2% correction in 24 hours. But some features remain unchanged despite the situation.

First, a massive change in the daily ETH issuance. The data showed that the supply of new ETH in the market has fallen by more than 90% unlike during the Proof of Work era.

Source: Ultrasound.money

As we have seen above, the issuance of ETH has dropped significantly. This could have a beneficial price effect, considering that the demand for the cryptocurrency remains the same, or increases, in the future.





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