The Cause of ETH Price Drops Below US$1500 After Merging Ethereum

However, as the day of the merge launch approached, the price actually moved against expectations, and even continued until the launch was over. At the time of writing, prices have fallen more than 10 percent from Tuesday's daily high.Cause of ETH Price Drop

According to a Decrypt report, crypto analytics firm Glassnode has flagged data on a derivatives exchange, which appears to indicate there will be a “sell the news” action ahead of the Ethereum merge update.The company claims that the merge has indeed carried a bullish sentiment since July. However, derivatives traders have already hedged their positions, expecting ETH prices to fall after the merge.

“Traders appear to be using call options to bet on the price of ETH through September, while options futures retreating suggests expectations for 'sell the news' are at play,” wrote researcher Glassnode.In addition, according to trading firm QCP Capital, there were two critical macroeconomic events that caused the ETH price to drop.

NewsBTC launched, QCP saw that there was less activity from the market, a few days before the merger.This is claimed to turn the merge from a potential price catalyst, into a “volatility killer” for Ether coins.

The existence of some miners who do not like the consensus switch to proof of stake (PoS) and ETH forks also creates its own uncertainty in the eyes of investors.The ETH fork is a form of disillusionment for miners who present the EthereumPoW (ETHW) network to maintain mining activities.

“ETH PoS in the long term should be bullish, but we don't expect a breakout (price) move immediately after the merge. We anticipate a huge pressure on the post-merge edition of ETH,” said QCP Capital.In addition, QCP also highlighted the macro sentiment that also affected the major crypto markets, namely the aggressive stance of the US central bank (the Fed) in fighting inflation, which continuously raised interest rates.

Evidently, it became the main cause of the collapse of the crypto market, including the price of ETH, from the previous ATH without being able to build any meaningful resistance.