Market Update 12/09/2022 - The reaction after The Merge 2.0

As per our last ”Market Update on Sept 5”, the merge finally took place on Sept 15, 2022! Is the technological transformation of the Ethereum blockchain a success? Definitely, it is. However, is the reaction portrayed as per prediction? 

 

It might seem far gone as ether’s price on Monday (EST+8)  tumbled to its lowest level since late July. 

 

 

 

 

 

 

 

 

The second largest cryptocurrency by market capitalization of US$162.59B was recently trading 

8.68% decline over the past 24 hours that continued its post Merge dip of the previous days.

 

 

 

 

Prior to the interest and excitement, ETh was traded at US$1646.96 on the day of the Merge and later drop to US$1409.9 in just a time span of 17 hours. ETH starts kicking off comfortably over US $1700 early in the week due to the high expectation for the shift of protocol from a proof-of-work (PoW) to more energy-efficient proof-of-stake (PoS). 

 

Understand more of the merge of the protocol. <Read Here>

 

The drop serves as a reflection of the impact of the merge might still not be readily apparent for some time.

 

 

 

Currently, due to inflation, recession, and more macroeconomic forces that have been affecting stocks and other riskier assets for months had continue to spike more scar to cryptos. Both main chains like BTC, ETH, and SOL as well as other coins that held underlying on the other blockchains. 

 

 

The largest cryptocurrency by market capitalization of 19.15M BTC,  Bitcoin’s price had dropped from US$22,619 on the Sept 13, 2022 to US$18,768 on the Sept 19, 2022, a drop of US$3851 – a 17% decline.  After is contant rise for a week, the drop below $19,000 — the lowest it had been since June. Thursday’s price drop of bitcoin extends a slide that began below US$21,000 following the release of August inflation data on Tuesday.

 

 

 

“Risky assets are struggling as Powell’s fight against inflation will remain aggressive even as it will trigger an economic slowdown,” – Edward Moya, a senior market analyst at Oanda

 

 

 

 

According to Popular crypto analyst Benjamin Cowen analysis broadcasted on his Youtube channel –For Ethereum to retest its prior low, it would need to go down 40%, but for Bitcoin to retest it’s own prior low, it would only need to go down approximately 10%”.

 

 

 

“Now the one thing to consider on this is if Ethereum retests its low – this is really important and this is why I want to make it clear how more volatile assets like Ethereum can really underperform Bitcoin in a bear market – imagine the S&P retests it’s low and we see that propagated across risk assets. If the S&P retests this low (3,636, points), then Bitcoin is likely to test its own low, and Ethereum would likely do the same.”

 

 

 

Reacting to the Merge, Charles Hoskinson, Co-founder of Cardano and also one of the founding team members of Ethereum who parted from the team in 2015 compared Ethereum in his tweet responding to a tweet that claimed that ETH staking withdrawals might be delayed beyond the Shanghai upgrade to “Hotel California” – a song about a prison where no one escapes from.

 

The Merge might still have more to unfold. The tweet that Charles response to – including a screenshot from the Ethereum developer’s Discord group showed Micah Zoltu, founder of Serv.eth Support saying that all documentation and publications have clarified that there’s no expected time for withdrawals of staked ETH.

 

 

 

 

After the long-anticipated Merge upgrade of the Ethereum (ETH) ecosystem took place, users start wondering if they will be able to unstake their already staked ETH tokens. It seems that ETH unstaking will remain unavailable until the announced Shanghai upgrade to the Ethereum network, as the crypto exchange’s support informed its users on September 15.

 

The Ethereum Foundation expected the Shanghai upgrade to take place “6-12 months following The Merge.” Which this might happening the sooner as March 2023 or it might even delay. 

 

Charles also condemned on Micah Zoltu’s statement which Chrles highlighted the differences of philosophical difference on the financial status between two blockchain stakers. 

 

 

Based on the update on Ethereum’s website says that sharding (a multi-phase upgrade to improve Ethereum’s scalability and capacity) is planned to be unveiled some time in 2023, depending on how much progress is made post-Merge. Sharding is crucial as it provides secure distribution of data storage requirements, enabling rollups to be even cheaper, and making nodes easier to operate. Thus, It is still unsure to foresee the plan and where will the coin be headed in the short-term run. 

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