The sugar high in the Ethereum merger on Thursday led to a sour weekend in the red for both the newly mined-free ETH and the top crypto Bitcoin.
Ethereum is down from its pre-merger perch of $1,580 to $1,335 at the time of writing, after a steep 6% drop within hours of the merge and down 15% overall late Sunday.
Bitcoin, meanwhile, fell to $19,414 on Friday, but saw a brief rally take it above $20,000 on Saturday. However, the increase was short-lived, with the largest cryptocurrency by market capitalization returning to Friday’s lows as the weekend drew to a close.
Ethereum fell 22% for the week, and Bitcoin fell 10%. The declines mirror a similar down week in which general economic metrics – everything from the consumer price index to traditional market indicators Nasdaq and S&P 500 – also fell.
But Ethereum’s declining fortunes after the merger contradict some analysts’ claims immediately after the upgrade that the impact of the merger on the value of ETH had already been priced into the market.
After the biggest event in Ethereum’s history since its launch, price movements still largely mirror Bitcoin’s.
Before the conversion, some had predicted a “merger wave”, but the momentary jump in the price of ETH quickly disappeared. Prominent crypto Twitter commentator Doctor Profit announced today that he had sold all of Ethereum.
The weekend also brought reports of the first “replay attack” targeting Ethereum and the newly hard-forked EthereumPoW blockchains. As with the invalid blockchain setting that briefly delayed the merge, this exploit was caused by a failure to verify the chain link ID to determine which blockchain a transaction took place on.
1/ Notice | BlockSec discovered that exploiters are replaying the message (call data) from the PoS chain @EthereumPow. The root cause of the exploit is that the bridge does not correctly verify the actual chain ID (which is maintained by itself) of the cross-chain message.
As for Bitcoin, its total market capitalization was heading back toward a six-week low of $18,661 on September 6, territory it has not touched since late June. Bitcoin’s total market cap was back below $375 billion on Sunday, a threshold last breached on September 6 and not since July 13 before that.
For his part, Doctor Profit – whose main claim to fame is predicting $18,000 as the “ultimate bottom” for Bitcoin as early as April 2021 – said that “the bottom is forming” with a likely princely range of $18,000 to $25,000 through next March .
#Bitcoin enters the “Bottom” phase, expecting targets between $18,000 and $25,000 by March 2023. The bottom is forming. I will continue to collect at these prices
This is based on TA only. Please consider the FED’s next decisions. 0.75 already priced in, 1bps and we see blood. pic.twitter.com/LRAgoBl6va
But much depends on the next move announced by the US central bank, he warns. While Doctor Profit feels that Bitcoin’s price can withstand a 0.75 basis point interest rate hike, a full 1 basis point would mean “we see blood.”
“When the FED decides on the big reset, we will all be fkd,” he tweeted.
The last Federal Reserve meeting in July produced an increase of 0.75%. The next meeting, set for September 21, is likely to produce another increase – the main question is how big an increase. Some expect Federal Reserve Chairman Jerome Powell to announce a full percent increase.
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