Ethereum crashed by nearly 25% after the merge. At the time of reporting, Ethereum is trading at $1,307 with a fall of 3.10% over the last 24hrs. Today, even the ETH/USD and ETH/BTC pairs have plunged by more than 20% and 17% respectively.
Reasons For Ethereum Price Plunge
There are several causes behind the Ethereum price plunge.
The first reason that pulled down ETH against the US dollar is the Federal Reserve’s interest rate hike by 75bps.
The second reason is the increased criticism that ETH faced after the merger. Till now only five staking pool operators have produced 60% of the blocks. These five entities include Lido Finance, Coinbase, Kraken, Binance, and Staked Us. Among these, Lido Dao holds the biggest share and has 4.19 million ETH deposited or 30% of the total amount of ETH staked into the network.
Next is the decrease in institutional investors or smart money toward Ethereum-based investment products. There has been a capital outflow of $15.4 million from Ethereum funds. Parallelly, Bitcoin investment funds have attracted $17.4 million.
The last reason is the selling pressure that Ethereum experienced from its proof-of-work (PoW) miners as they sold $40 million worth of Ether in just a day.
Hence, the worsening macroeconomic situation might lead to further dips in the asset’s price.