- Ether is trading around US$1,475 at the time of writing, the first time it’s dropped below US$1,500 in over a week.
- As the excitement around the Merge subsides, it would be natural to expect a bit of rotation back.
The software upgrade of Ethereum, from a purely technological standpoint, is a massive turning point in the evolution of cryptocurrencies and a landmark achievement that has been years in the making.
But traders aren’t into crypto for the history, they’re here for the money, which is why, Ether, the native token of the Ethereum blockchain saw a sharp sell off in a “sell the news” trade that became especially crowded.
Paring a rally since mid-June that was sparked in part by optimism about the Ethereum update called the Merge to slash the network’s energy use, Ether fell sharply on news of the successful software upgrade, dropping as much as 3% on Friday, following a more than 6% slide Thursday.
Ether is trading around US$1,475 at the time of writing, the first time it’s dropped below US$1,500 in over a week.
According to data from CoinGecko, Ether’s drop is more than the rest of the crypto market right now, which is down about 3% on the whole, with Bitcoin down about 2%.
As the excitement around the Merge subsides, it would be natural to expect a bit of rotation back.
The hype around the Merge appeared to be generating bullish sentiment around Ether in July, but sophisticated derivatives traders were already hedging their bets, expecting the price of the token to drop after the event, according to Glassnode data.
Ethereum’s revamp makes it vastly more energy efficient and paves the way for it to scale up and become quicker.
The move to a so-called proof-of-stake approach from proof-of-work was years in the making and seems to have gone smoothly, though hiccups remain possible.
