Why Ethereum Price Isn’t Going Up Ahead of The Merge
Trying to make sense of the supposedly bullish event
Ethereum price was relatively alright up to some time ago, until just shortly after the Luna/UST crash. The fans touted the crash as one of the signs of ‘Ethereum superiority.’ For a while, they maintained that status, also supported by the fact that ETH was only down 60%-ish from the all-time high.
But then it all went to s*it.
It is apparent as we look into the ETH-BTC chart. The faltering dominance started on May 10 around the Terra crash, but only two weeks after Ethereum finally broke its strong support against BTC. Ethereum, which maintain slightly over $2,000 per token for weeks, finally succumbed to the under 2k level.
The price action is supposed not to happen because of various reasons. But one of the biggest reasons is the upcoming merge event. Ethereum was expected to hold up or even thrive until the event takes place. It is a bullish signal. The merge was the ‘narrative’ everyone has been waiting for.
Beyond just an upgrade: What Ethereum Merge is about
The merge is probably the most highly-anticipated event not just for Ethereum, but also for the broader crypto industry. The migration to Proof of Stake, which has been delayed several times — or years — is a chance for the crypto industry to prove to the world that it is up to the task to be the destined future of finance.
It’s a delicate event all around. So much is at stake. Even more so, at the technical level, it isn’t an easy task. Like upgrading a plane while it’s flying, as Vitalik Buterin, Ethereum co-founder once said.
The beacon chain is a parallel Ethereum chain where the Proof of Stake mechanism is developed. Serving as a coordinator for the migration, the beacon chain will merge with Ethereum Mainnet, hence the name: The Merge. After merging, the previously Proof of Work Ethereum Mainnet will then run exclusively with the new POS mechanism for its consensus. It may look straightforward as a general concept, but beneath, the process is not without (a lot of) hiccups.