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5 Things to Know in Crypto Today: ETH Merge Sinks the Market

By:
Bob Mason
Published: Sep 15, 2022, 23:47 GMT+00:00

It is a bearish Thursday session for the crypto market, with the Ethereum Merge and other bearish news sending the broader market into the red.

Crypto news - FX Empire.

Key Insights:

  • The heavily anticipated Ethereum (ETH) Merge took place today, with no reports of any immediate hiccups
  • Despite the crypto event of the year, investors are bearish, with the crypto market cap down by $41.8 billion to $922 billion.
  • However, Celsius (CEL) was in breakout mode on news of restructuring plans before succumbing to crypto market forces.

The Ethereum (ETH) Merge Took Place Seamlessly

On Thursday, the Ethereum (ETH) Merge took place, with Ethereum seamlessly moving to a Proof-of-Stake (PoS) protocol.

Market anticipation of the crypto event of the year saw ETH return to $2,000 in August before settling at a pre-Merge $1,650.

However, investors jumped ship post-Merge, with ETH down 9.5% to $1,484.

ETH slides post-Merge
ETHUSD 150922 Daily Chart

Other Merge-linked coins were also deep in negative territory. Ravencoin (RVN) was down 21.8%, with ethereum classic (ETC) down 8.31%. Things were not much better for Lido DAO (LDO), which was down 7.20% with 60 minutes of the Thursday session remaining.

The post-Merge sell-off left the total crypto market cap down $41.8 billion to $922.13 billion.

Crypto market resumes bearish trend.
Crypto Market Cap Daily Chart 150922

Celsius Plans a Business Resuscitation

After freezing withdrawals and filing for bankruptcy in July, Celsius has been in restructuring mode. Since the filing, Celsius received Court permission to generate revenue via crypto mining facilities to support withdrawal demands.

The latest news is a plan to shift from lender to crypto custodian. Celsius plans to introduce a fee structure to drive revenue streams from different types of transactions.

Market reaction to the news was bullish, with Celsius (CEL) rallying 35.8% to a Thursday and September high of $2.50 before falling into the red.

CEL sees bullish response to restructuring news.
CELUSD 150922 Daily Chart

South Korea Issue Terra Labs Founder Arrest Warrant

This week, news hit the wires of South Korea issuing a warrant for the arrest of Terra Labs founder Do Kwon. Investors’ reaction to the news was brutal, with LUNA (LUNA) and Terra Classic (LUNC) paying the price. In addition to the arrest warrant, there was news of the authorities applying to invalidate Do Kwon’s passport.

In recent weeks, LUNA and LUNC had found strong support before a retrace from September highs.

Late in the Thursday session, LUNA and LUNC were down 15% and 12%, respectively.

LUNC and LUNA sink on Do Kwon news.
LUNC 150922 Daily Chart

Fed Fear Subsides Following US Wholesale Inflation Figures for August

Following Tuesday’s US CPI report, market angst over a percentage point Fed rate hike eased ahead of the Friday session.

Softer US wholesale inflation figures and disappointing Philly Fed Manufacturing PMI and retail sales figures appear to have shut the door on a more hawkish move.

The shift in sentiment provided pre-Merge crypto market support.

Currently, the split between a 75-basis point and percentage point rate hike is 80% to 20% in favor of a 75-basis point hike. Ahead of Thursday’s retail sales and Philly Fed numbers, the split had stood at 75% to 25% in favor of a 75% basis point hike.

Markets price out percentage point Fed rate hike.
FED Rate Hike Bets 150922

China and Vietnam Show Asia’s Crypto Adoption Footprint

This week, Chainalysis released its latest crypto adoption rankings, and China appeared in the top ten, despite the government crackdown on cryptos.

Vietnam ranked first, the US fifth, and China tenth.

Chainalysis crypto adoption rankings
Chainalysis rankings 160922

According to the September report, global adoption plateaued in the last year after steadily rising since 2019.

Crypto adoption hit by crypto winter.
Global Index Score Quarterly

The movements in the Global Index score reflected the impact of the crypto winter on adoption rates. Adoption rates may become another headwind for the crypto market.

 

About the Author

Bob Masonauthor

With over 20 years of experience in the finance industry, Bob has been managing regional teams across Europe and Asia and focusing on analytics across both corporate and financial institutions. Currently he is covering developments relating to the financial markets, including currencies, commodities, alternative asset classes, and global equities.

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