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In short

  • Ethereum price fell almost 8% today, dropping below $1,500 for the first time in over a week.
  • The plunge comes after Ethereum’s successful merger, in which it switched to a more environmentally friendly consensus model.

The Ethereum merge went off without a hitch From a technical point of view, but the sentiment around ETH after the switch to a more eco-friendly consensus model could dip. Today, the price of ETH dropped below $1,500 for the first time in over a week.

According to data from CoinGecko, ETH is down nearly 8% in the past 24 hours to a current price of $1,485. That’s a steeper decline than the rest of the crypto market right now, which CoinGecko says is down around 3% overall, with Bitcoin down about 2%.

Initially, the price of ETH had remained largely stable after the overnight meltdown, hovering around the $1,600 mark with slight ebbs and flows. However, shortly after 10 a.m. ET this morning, the price fell sharply from around $1,585 to its current value. The move is not entirely unexpected.

In a report in early August, crypto analytics firm Glassnode flagged derivatives exchange data that indicated the merger was shaping up to be a “sell the news” event. The hype around the merger seemed to be generate bullish sentiment around Ethereum in July, but sophisticated derivatives traders were already hedging their bets, expecting the price of ETH to drop after the event, according to Glassnode.

“Traders appear to be using call options to bet on the price of ETH through September, while options futures and backwardation indicate a news sell expectation is in play” , the Glassnode researchers wrote in a report at the time.

Merge is the name of the Ethereum developers for the long-awaited change from the original proof of work consensus modelin which thousands and thousands of users use powerful computers to secure the network and potentially earn cryptocurrency rewards.

under the new proof of stake template– in which validators put (or hold) coins into the network to process transactions – the network is estimated to use over 99% less energy than before, according to the Ethereum Foundation.

While many Ethereum supporters were in favor of the merger, some ecosystem participants were less thrilled. For example, some have derived the previous version of the network to create the new EthereumPoW network (ETHW)who will retain mining, while other miners have instead started mining coins like Ethereum Classic (ETC) or Ravencoin (RVN).

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