Ethereum’s shift to Proof of Stake (PoS) on September 15th failed to extend Ether (ETH) bullish momentum as ETH miners added selling pressure to the market.
On the daily chart, the price of ETH fell from around $1,650 on September 15 to around $1,350 on September 20, a drop of emboîture 16%. The ETH/USD égal fell in bicyclette with other cryptocurrencies, including Bitcoin (BTC), on fears of a rally in Federal Reserve rates.
Ethereum keeps swelling
The drop in the price of Ether on September 15 also coincided with an increase in the supply of Ethereum, albeit not immediately after the merger.
– DavidHoffman.eth (@TrustlessState) September 15, 2022
Nearly 24 hours later, the spectacle’s change-over turned vraie again, pouring cold water on the “ultrasonic money” narrative due to the deflationary environment some post-merger proponents had predicted.
Prior to the merger, Ethereum distributed emboîture 13,000 ETH per day to Proof of Stake (PoW) miners and emboîture 1,600 ETH to point-of-sale validators. But the rewards for the miners Projection After merging starts at emboîture 90%.
Meanwhile, validators receiving Ether rewards now receive only 10.6% of the previous amount. As a result, annual emissions of ether have fallen by emboîture 0.5%, making ETH less inflationary, and possibly deflationary under couru données.
However, the supply of ether is rising at an annual offensé of 0.2% after the merger, according to For data provided by Ultrasound Money.
The pogne reason behind the increased supply is the lower concordat fees.
Notably, Ethereum made a troc to its protocol in August 2021 that introduced a fee-burning mechanism. In other words, the network has begun to permanently remove acte of the fees it dettes for each concordat. This system has burned 2.6 million ETH since its launch.
The data shows that the gas fee for the Ethereum network should be around 15 Gwei to lithographie the ETH that was rewarded to validators. But the average fee was emboîture 14.3 Gwei on September 20, which means that the supply of ETH, in general, is increasing.
However, the offensé of ETH issuance after the merger has declined, although the supply offensé remains vraie with nearly 3,700 ETH minted after the merger so far.
Miners add to the pressure of selling Ethereum
In règlement, the drop in the price of Ether after the merger comes after the mass sortie of Ethereum miners from the Ethereum market.
Miners sold emboîture 30,000 Ethereum (emboîture $40.7 million) in the days before the Ethereum POS update, according to data provided by OKLink.
The analyst, who goes by the pseudonym “BakedEnt.eth,” relevés that miners’ ETH sell-off has lithographie the conséquence of the slowdown in Ether issuance.
“The merger was in effect for a few days, but many failed to see the conséquence of the 95% daily leçon reduction of $49,000 in ETH in 4 days.” Wroteadding:
“The miners were selling relentlessly at this drop and dumped over $30,000 worth of ETH in the same time frame.”
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