The Merge was successfully completed on September 15, but Ethereum (ETH) continued to decline as traders anticipated that a dip under the $1,700 mark would result in the opening of several short positions. Considering the hysteria surrounding the Merge, whales began liquidating their ETH holdings last month. A further decline below $1430 will be catastrophic for the asset, which has currently reached an inflection point.
A Dangerous Phase for Ethereum
In the week following the merge, Ethereum’s market capitalization fell by nearly $40 billion and $25 billion in that week alone. Whales offloaded their Ethereum (ETH) holdings just before the price drop to take advantage of the most anticipated event in the cryptocurrency market.
According to the Merge story, experts had forecasted that the Ethereum price would drop, which it did as “whales” dumped over $1.5 billion worth of ETH in only two days. In reality, the price has reached a pivot point, with support coming in at $1,430 due to heavy selling by “whales.”
Several crypto experts have predicted that if the price of ETH falls below $1430, it could reach $1,000, a claim supported by analyst Ali Martinez.
Why Is Ethereum Capitulating?
Over $1.5 billion in ETH was dumped by whales over the previous 48 hours, according to Whale Alerts. The cryptocurrency exchange Binance has received a massive transfer of 240,099 ETH from an anonymous “whale” valued at almost $357.90 million. Additionally, many “whales” have made massive ETH transfers, totaling between $50 million and $100 million.
Furthermore, on September 30th, $2 billion of options in Ethereum will expire, which is a cause for concern and could lead to a further drop in the price of ETH. Considering Ethereum now a deflationary currency, its supply will also decrease. As time goes on, the number of ETH available will decrease due to the EIP-1559 burning mechanism. Nonetheless, statistics show that 400 ETH has been added to the supply since the merge.
What Lies Ahead For Ethereum?
During his tenure as SEC chairman, Gary Gensler indicated that the merge had made Ethereum safer. According to him, the “Howe Test” security criteria are met by any PoS cryptocurrency or issuer that lets holders stake their coins.
Therefore, Ethereum’s switch to PoS will have lasting consequences. The next step will be the surge, verge, purge and splurge which will mark the later stages of the Ethereum roadmap.
