The crypto market loses $30 billion in 24 hours as Ethereum’s Merge fails to spark a surge
The cryptocurrency market is still responding to the Ethereum (ETH) Merge event, which changed the blockchain’s status to Proof-of-Stake (PoS). Despite the event being billed as optimistic, the crypto market has seen capital outflows overshadowed by other reasons such as soaring inflation 24 hours later.
In fact, as of September 16, the worldwide crypto market value was $958.83 billion, a decrease of around 3.2% or $32.24 billion from September 15.
Before the Merge, a portion of the cryptocurrency industry predicted that the event would likely cause the price of Ethereum to surge. However, as of press time 24 hours later, none of the predictions has materialized, with ETH trading at $1,400, a decrease of about 10% during the timeframe.
Bitcoin (BTC) is also trading in the red, falling below the critical $20,000 threshold. At press time, the value of the cryptocurrency was $19,700.
Although the Merge does not look to have a beneficial short-term effect on the cryptocurrency market as a whole, the industry will need another optimistic story to spark a future climb.
Due to the successful completion of the Merge, bulls seem overbought, which may signal that the upgrade was a “buy the rumor, sell the news” occurrence.
This situation is reinforced in part by a prior Finbold analysis indicating that Ethereum inflows to exchanges began to increase on September 12 and totalled around 700,000 ETH before reaching approximately 1.7 million ETH on September 14.
For instance, the asset’s social dominance reached 14.79% on September 13 after increasing by 23.19% in a single month.
Similarly, the chief strategy officer of crypto asset management firm CoinShares, Meltem Demirors, said that macro environment issues may discourage fresh capital from joining Ethereum, referring to the update as a “buy the rumor, sell the news event.”
While rising inflation is the primary cause of the sell-off, other broad macroeconomic variables may also be at play. The Federal Reserve is widely expected to raise interest rates in response to the latest inflation data.
According to cryptocurrency trading specialist Michal van de Poppe, the next FED meeting is thus seen as a crucial predictor of market direction.
Overall, it is important to note that crypto specialists have said that the Merge would have a long-term favourable effect on the whole cryptocurrency market.