Top Reason Why Ethereum Price Plunged Heavily After The Merge
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Ethereum crashed almost 25% after the merger. At the time of reporting, Ethereum is trading at $1,307, down 3.10% in the last 24 hours. Today, even the ETH/USD and ETH/BTC pairs are down more than 20% and 17% respectively.
Reasons for Ethereum price collapse
There are several reasons behind the drop in Ethereum price.
The first reason that dropped ETH against the US dollar is the 75 bps interest rate hike by the Federal Reserve.
Another reason is the increased criticism that ETH faced after the merger. To date, only five staking pool operators have produced 60% of the blocks. These five entities include Lido Finance, Coinbase, Kraken, Binance and Staked Us. Of these, Lido Dao owns the largest share and has 4.19 million ETH deposited, or 30% of the total amount of ETH on the network.
Next is the decline of institutional investors or smart money towards Ethereum based investment products. 15.4 million dollars of capital has left Ethereum's funds. Meanwhile, Bitcoin mutual funds have attracted $17.4 million.
The final reason is the selling pressure Ethereum experienced from its proof-of-work (PoW) miners, who sold $40 million worth of ether in just one day.
Thus, a deterioration in the macroeconomic situation may lead to a further decrease in the price of the asset.
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