Ethereum continues its slump after the merge. ETH has dropped over 25% in the last 7 days. In the last 24 hours, ETH is down by over 10% and has fallen below the $1.3K mark. Ethereum is not the only cryptocurrency facing the brunt of the slowdown. Bitcoin prices have fallen below $19K after falling by more than 6% in the last 24 hours. However, according to an expert, the price drop of Ethereum is a FUD.
How Ethereum Drop Is FUD
According to major crypto and Ethereum influencer, @VivekVentures, the price action of Ethereum is “short-term noise”. He believes that Bitcoin maximalists are currently spreading FUD around Ethereum and the merge. Vivek reveals that Ethereum’s issuance is down by 95% since moving to the merge. This means that Ethereum needs to issue 95% fewer tokens without any drop-off in the security.
In the 3 days after the merge, Ethereum issued less than 3000 tokens. Under the Proof-of-work mode, it would have issued over 40,000 tokens.
Vivek also explains the difference in selling pressure due to the shift of consensus mechanism from the merge. The current Proof-of-stake model has significantly less selling pressure than the former proof-of-work model. Ethereum validators cannot sell their block rewards for a 6 to 12 months period. As a result, the selling pressure on Ethereum right now is close to zero.
On the other hand, assuming that the price of ETH remains constant at $1400, the total selling pressure during the PoW era would be $7 billion. Vivek also reveals that the gas fees of Ethereum are currently greater than 15 gwei. As a result, there is buying pressure on Ethereum due to the deflationary impact of the merge.
Bitcoin Vs. Ethereum Narrative War
Since the merge, the Bitcoin and Ethereum communities have engaged in a narrative war. Jack Dorsey, the founder of Twitter, revealed that the Bitcoin community needs to prepare for a narrative war. Bitcoin currently uses the Proof-of-work mode, which is criticized for its high energy usage.
On the other hand, Ethereum’s Proof-of-stake has potential centralization issues.
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.