The Ethereum merge finally happened on September 15. There was a lot of hype building up to this day. Despite the negative outlook in the crypto market, Ether prices managed to rise in anticipation of the big merge event. However, an Ethereum price crash occurred right after the merge ended. Why is Ethereum price down after the merge? Will ETH crash to $1,000? Let’s analyze in this Ethereum price analysis article.
What was the Ethereum Merge about?
The Ethereum Merge is the merger of the Beacon Chain with the Ethereum mainnet and is the most important step in the transition to Ethereum 2.0. On the Beacon Chain, Ethereum first introduced the Proof-of-Stake consensus mechanism, introduced validators, and tested the new system intensively over the past few months. This merge adds the beacon chain to the mainnet so that the entire network is now running on proof-of-stake.
Learn more about the Proof-of-Stake consensus mechanism in this in-depth article.
Why is Ethereum Price Down?
As the day of the merge came closer, many traders and speculators decided to open long positions in ETH and other cryptos. The hope was that prices skyrocket after the merge, as many analysts anticipated. We at CryptoTicker published an article warning to buy Ether before the merge, you can find the article here. We specifically talked about how the crypto market as a whole was not doing okay. This usually affects all cryptocurrencies with no exception. Despite Ethereum’s merge event being a positive impact on the crypto market, it won’t be enough to lift prices higher.
When the merge happened, crypto prices did not move. If anything, they moved slightly lower. This pushed traders and speculators to liquidate their open positions, causing a severe drop in ETH prices. If we look at figure 1 below, we can see that prices reached the exact area before the pump.
Ethereum Price Prediction – Will Ethereum crash to $1,000?
Ether prices are currently walking on a very fine line. As the crypto market continues to be bearish, Ether risks reaching new lows. This is also confirmed by the head and shoulder formation clearly visible in figure 2 below. If Ether prices fail to retrace higher from their current support of $1,430, we can see Ether prices crash to the following prices respectively: