Ethereum Floating Above US$1k Throughout 2022 is Extremely Critical

Ethereum Floating
Ethereum Floating

Ethereum (ETH) is down 11.2% on the day and almost 30% on the week. Disaster is knocking on the door?

Ethereum (ETH) is one of the most significant altcoins in the market and one of Bitcoin’s biggest competitors. For the past few months, since the fall of the BTC price, the crypto investor community has been rooting for Ethereum to take over Bitcoin as the world’s most prominent cryptocurrency. But looks like this dream will soon shatter because when the king goes down, the kingdom also breaks into pieces. Ethereum (ETH) is down 11.2% on the day and almost 30% on the week.

The delay on the ‘difficulty bomb’ brings more bad news for Ethereum investors who were wishing for the completion of the Ethereum Merge upgrade in August. The upgrade was first started by ConsenSys researcher Mikhail Kalinin, but as days passed by, the Ethereum upgrade work has been undertaken by several developers from the broader community. The Merge aims to migrate Ethereum from its energy-intensive proof-of-work algorithm to the proof-of-stake algorithm. Buterin has signified that the upgrade will most probably be launched by August, in case there are no significant issues.

Ethereum mining becomes unprofitable for the first time since 2020

According to FXS, Ethereum mining has become unprofitable for many users connected to the traditional energy grid for the first time since 2020. Ethereum prices hit a low of US$1,188 while energy prices skyrocketed. With soaring electricity costs in New England, Connecticut, Maine, Massachusetts, New Hampshire, and Rhode Island, the cost is higher than the Ethereum reward for the same GPU. Therefore, miners paying more than US$0.245 per kWh are currently incurring losses.

The bear market is hitting Ethereum really hard, and this is evident from the price performance. Ethereum coin dropped from US$1800 to a low of US$1,103 in less than 3 days. This is a huge drop and shows the intensity of the bear condition the crypto market is experiencing right now.

The major factor driving the plummeting Ethereum price is the Fed regulations regarding the soaring inflation. Just like last month, the Federal Reserve is expected to hike the rates because inflation has increased. This is what has caused the massive withdrawal in the stock and crypto market.

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