Ethereum has dropped over 25% in the past seven days following its historic transition to Proof-of-Stake (PoS). Here's why the Merge—despite its technical success—failed to boost ETH's price and what lies ahead for the network.
Key Takeaways
- Ethereum completed the Merge on September 15, but ETH prices fell 17.8% post-event (now at $1,320).
- The "sell the news" effect, macroeconomic pressures, and delayed institutional adoption contributed to the downturn.
- PoS reduces Ethereum’s energy consumption by 99.95% and cuts ETH issuance by ~90%, creating long-term deflationary pressure.
Post-Merge Selloff Hits Ethereum Hard
Traders rushed to dump ETH after the Merge, triggering a 25.1% weekly decline. The selloff mirrors broader crypto market weakness—Bitcoin dipped below $19,000, while Ethereum-related tokens (ETC, LDO) fell 9-12.6%.
👉 Why experts say ETH’s fundamentals remain strong despite the drop
Three factors fueled the downturn:
- "Buy the Rumor, Sell the News": Traders cashed out post-Merge profits amid hype exhaustion. Similar patterns followed Coinbase’s 2021 IPO.
- Macroeconomic Headwinds: Inflation data (8.3% CPI) spurred risk-off sentiment. The Fed plans 75-100 bps rate hikes this week.
- Slow Institutional Adoption: While PoS improves ESG compliance, large investors may take months to reevaluate ETH.
What Changed After the Merge?
| Upgrade | Impact |
|---------|--------|
| Energy Efficiency | 99.95% reduction in carbon footprint |
| ETH Issuance | ~90% fewer new coins minted daily |
| Staking Rewards | 4% annual yield for validators |
Despite these improvements, markets need time to process the supply shock—similar to Bitcoin’s delayed post-halving rallies.
Why ETH’s Price Reaction Lagged
- Gradual Supply Reduction: Deflationary effects (Ultrasonic Money) will compound over months.
- Bitcoin’s Shadow: BTC’s PoW energy use still clouds crypto’s public perception.
- No Immediate Catalysts: With macro uncertainty, traders lack new narratives to rally behind.
👉 How stakers can earn passive income post-Merge
FAQ: Ethereum Merge Fallout
Q: Will ETH’s price recover?
A: Yes—long-term holders benefit from reduced issuance and staking yields, but short-term volatility may persist.
Q: Is Ethereum now "greener" than Bitcoin?
A: Absolutely. PoS slashed energy use by ~99.95%, while BTC remains PoW-dependent.
Q: What’s next for Ethereum?
A: Focus shifts to scaling (Shanghai upgrade) and layer-2 adoption (Arbitrum, Optimism).
Q: Should I buy ETH now?
A: Dollar-cost averaging during downturns historically outperforms timing the market.
While the Merge didn’t trigger a price surge, it laid the groundwork for Ethereum’s sustainable future. As macro conditions stabilize, ETH’s improved fundamentals could shine.