Ethereum: ETH continue drop price could be the result of past ETH's ghost
The circulating supply of Ethereum [ETH] has decreased significantly since the long-awaited Meltdown. According to data from Extreme Money, the supply of top altcoins has increased by just 5,000 and an annual inflation rate of 0.19% since September 15.
Data from the same source reveals that if a PoW consensus mechanism still powers ETH, its supply inside it will be as high as 98,000. In addition, its inflation rate will be set at 3.78% for the same period. After the Merge, the network distributes with the need for miners to validate transactions on the network and the rewards are paid to them.
Many believe that with pre-merger ETH locked up until the Shanghai update and miner rewards drop, post-merger ETH will see reduced selling pressure. However, this did not happen. Since September 15, the price per ETH has dropped 23%, data from CoinMarketCap reveals.
Keeping miners accountable
As IntoTheBlock finds in a new report, although the continued decline in the price of leading altcoins is partly due to a corresponding decline in the broader crypto market, “miners can also partly responsible for the recent increase in selling pressure and the decline in prices."
IntoTheBlock noticed that the miner's reserves on Ethereum were continuously decreasing before consolidating. Since the September 15 consolidation, the mining reserves on the Ethereum mainnet have dropped 16%, from $124 million to $92 million. According to the report, this drop shows miner sales of 17,000 ETH since the Merger.
A look at Miners Netflow on the Ethereum mainnet also revealed some significant ETH sell-offs over the past three months. These large sales have contributed to the price of the top alternative continuing to fall. According to IntoTheBlock, in the past three months, there were two obvious periods where the amount of ETH remaining by the mining addresses exceeded the amount of ETH sent to them.
The first massive sale occurred on September 4 and amounted to a total of $18 million. The second amounted to $16 million and occurred on the day of the Merger. At press time, Miners Netflow posted a negative value, indicating that ETH continues to decrease in miner addresses, especially as old miners on the Ethereum Network scramble for new homes.
According to IntoTheBlock, after the Merge and as expected, the mining activity on the Ethereum mainnet has decreased significantly. As of September 21, it stands at just 0.1%.
Interestingly, although miners no longer serve any purpose on the Ethereum network, they control a large amount of ETH in their reserves, data from IntoTheBlock reveals. At the time of publication, the figure was $84.95 million.
Sep 24, 2022