Reporter | Si LinweiAfter the successful upgrade of "Merge", which is closely watched by the entire network, the cryptocurrency market, including Ethereum, has not been able to break out of its independent market.On September 20th, the latest market data showed that Ethereum's current quotation reached $1360, a weekly drop of 20%; Bitcoin also fell to the critical $20000 level, quoting $19312, a weekly decline of 13
Reporter | Si Linwei
After the successful upgrade of "Merge", which is closely watched by the entire network, the cryptocurrency market, including Ethereum, has not been able to break out of its independent market.
On September 20th, the latest market data showed that Ethereum's current quotation reached $1360, a weekly drop of 20%; Bitcoin also fell to the critical $20000 level, quoting $19312, a weekly decline of 13.2%. Five days before the merger of Ethereum on September 15th, the price of Ethereum was still close to $1800, but yesterday it fell below $1300.
Since the collapse of cryptocurrency in May, the price of Bitcoin has been fluctuating above $20000 for most of the past four months, but recently it has hit its lowest point since May.
Specifically, the data on the chain is not optimistic. According to CoinShares' data, investment products related to ETH have net outflows for the fourth consecutive week ending September 16, with outflows exceeding the newly added funds of $15.4 million. During the selling period, Ethereum's trading volume rapidly increased. Its market share has reached a historic high of nearly 70% relative to Bitcoin. The significant liquidation of leveraged long positions in the derivatives market has exacerbated the decline in spot prices, "said a report from Kaiko, a cryptodata company, attempting to explain why Ethereum fell so much after the merger.
Distributed Technology Researcher Zhang Shigen told Interface News: The price reflects people's expectations. Before the merger of Ethereum, those who believed that Ethereum was a positive merger had already bought it in advance. After the merger was successful, there were no new positive expectations to support it, so these people did not form new purchasing power. There was also a portion of the selling from miners. In the PoW era, miners only needed to sell a portion of Ethereum to pay their electricity bills. The conversion of PoW to PoS touched the core interests of miners, causing them to retaliate and smash the market
But representing the interests of miners, the new token ETHW, which emerged from Ethereum's hard fork, has seen its price drop by over 80% since its listing on FTX, and is also facing the threat of further forking.
Furthermore, it is worth noting that recently, the US regulatory authorities have also begun to adjust their regulatory wording for Ethereum, attempting to expand its regulatory scope. When the U.S. Securities and Exchange Commission filed a federal lawsuit against a cryptocurrency practitioner on Monday, it mentioned that "the entire Ethereum is within the regulatory scope of the United States". In paragraph 69 of the lawsuit, the U.S. Securities and Exchange Commission mentioned the lawsuit not only because the case of the cryptocurrency practitioner involves transactions in the United States, but also because, in essence, the entire Ethereum network belongs to the authority of the United States government. According to Etherscan's data, currently, 45.85% of Ethereum verification nodes come from the United States. In contrast, the second largest node density is in Germany, accounting for 19%.
In the short term, the Federal Reserve's interest rate hike policy announced this Thursday firmly holds the fate of cryptocurrencies. On Wednesday, September 21st, at 14:00 pm Eastern Time (02:00 am Beijing Time on Thursday), the Federal Reserve's FOMC will release interest rate resolutions, policy statements, and economic expectations. Subsequently, Federal Reserve Chairman Powell will hold a monetary policy press conference.
With the release of the US August CPI data, which exceeded expectations, Goldman Sachs has raised its federal funds rate forecast by 75 basis points in the past two weeks. It is now expected that the FOMC will raise interest rates by 75 basis points in September (previously predicted by 50 basis points), 50 basis points in November, 50 basis points in December, and the final interest rate will rise to 4% -4.25% by the end of 2022.
As cryptocurrencies gradually integrate into the global economic system and global macroeconomic changes determine their ultimate direction, it is difficult to hope for cryptocurrencies to emerge from independent markets in the short term.
Some analysts believe that the cryptocurrency options that will be delivered next Friday will also have a certain impact. Based on current data, the maximum resistance level for Bitcoin is $23000, which is completely impossible to achieve unless interest rate hikes and terminal interest rates are within expectations. The current short to long ratio is 0.56, and bullish sentiment still dominates. The current outstanding options are nearly 90000 Bitcoins, with an expected amount of around $1.7 billion.
On the Ethereum side, after the successful upgrade, the next step will be an upgrade called "Shanghai". Distributed technology researcher Zhang Shigen told Interface News that after the upgrade of "Shanghai", the pledged Ethereum in BeaconChain can begin to withdraw cash, which will face a certain degree of selling pressure at that time; After the conversion of Ethereum to PoS, whether the financial services derived from Ethereum PoS can attract more traditional funds is an important factor affecting the price trend of Ethereum. This part may be judged by observing the growth of Ethereum PoS pledges. The entire cryptocurrency market needs blockchain to be applied on a larger scale in order to usher in the next round of bull market. Traditional users have unconsciously entered the Web3 field, which requires more innovation to support.
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