HomeBlockchainBlockchain NewsEther falls after smart contract network completes 'Merge'

Ether falls after smart contract network completes ‘Merge’

Ether prices fell on Thursday after the Ethereum network completed its transition to a proof-of-stake consensus mechanism, also known as the “Merge”. Ether last fell 5.6% to $1,501.88, after previously dropping to $1,459.00. Traders had expected prices to drop after the transition late Wednesday evening.

It’s important to recognize that merge is already expensive. Ethereum is already up over 100% since its June lows. Therefore, profits may not be sustainable if the merge has a positive effect on Ethereum price action.

After the cryptocurrency’s value fell along with other risky assets in the first half of the year, Ether recovered at the start of the second half and has since outperformed Bitcoin. It is up nearly 70% in July alone, compared to Bitcoin’s 27% gain. In August, it fell by about 9.3%, while Bitcoin fell by about 17%.

Many investors expect this to be a ‘sell the news’ type of event, meaning that after an  initial spike, we may actually see ETH price fall over the next few days or weeks, especially given that, like all other crypto market participants, ETH is still largely driven by a negative macroeconomic outlook.

Investors have been cheering Ethereum’s planned technology upgrade for months, as it could turn Ether into profitability and improve network security in an energy-efficient way. Many have called this moment one of the most important moments in the short history of digital currencies.

Many in the cryptocurrency market have also looked at a popular trade. investors have bought spot Ether and short Ether perpetual futures to obtain a free “fork” with no risk of the Ether price version of the Ethereum token. Some analysts predict a significant decrease in trading activity after the merge. Now that the merge has taken place, traders and funds are positioning themselves out of it and this trade is almost over.

On the other hand, asset managers and owners are actually positioning themselves for the long-term game. The Ethereum merge is really just one step in a series of upgrades that will provide greater scalability which will lead to performance upgrades to the Ethereum network.

Source link

- Advertisment -

Most Popular

- Advertisment -