Why Did Ethereum Fail To React After “The Merge”

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Last Updated on October 11, 2022 by Bitfinsider

At the time of writing, Ethereum (ETH) is trading at $1,480, down 7% in the last 24 hours and 8% in the last seven days. The second cryptocurrency failed to consolidate a rally into previously lost territory; rather, price action on lower timeframes appears to be trending downward.

Ethereum was able to approach the $1,800 price market before being rejected due to two critical macroeconomic events. The trading firm QCP Capital observed a lack of market activity in the days preceding “The Merge.”

In that sense, the event transitioned from being a potential price catalyst in either direction to a “volatility killer.” The firm believes that the most uncertain aspect of the PoS migration was the ETH forks and miners attempting to claim a portion of the cryptocurrency’s market share.

While a slowdown in inflation may help the about, QCP Capital believes the metric’s upward trend has “peaked and is headed lower.” This could provide support for crypto and other risk assets to recover from their current levels.

The market is pricing in a more aggressive Federal Reserve (Fed), which could act as a bullish factor if the institution hints at a more moderate monetary policy. Market participants expect the Fed to raise interest rates by 75 to 100 basis points at the time of writing (bps).

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