Crypto Market Crashes Despite The Merge Being Only Halfway Through
In the early hours of September 7, the cryptocurrency market experienced a severe downturn, with major coins like BTC and ETH dropping more than 6% in value.
Around midnight on September 7, Bitcoin (BTC), the world’s largest cryptocurrency, saw a sharp sell-off, falling from $19,700 to $19,175. In the following hours, BTC continued to decline, reaching a low of $18,649 — its lowest point since June 30.
BTC/USDT 15m Chart on Binance as of 08:05 AM September 7, 2022
The September 6 BTC candle (UTC) closed below $19,000, an event not seen in the past two months, indicating a significant bearish shift for the top cryptocurrency.
Similarly, Ethereum (ETH) had a rough time, dropping over 7% in the past 24 hours, from $1,662 to $1,521.
ETH/USDT 15m Chart on Binance as of 08:05 AM September 7, 2022
On the evening of September 6, Ethereum successfully completed the Bellatrix hard fork, the first phase of The Merge — the most crucial upgrade in the coin's history. In about a week, on September 13, Ethereum is expected to execute the Paris hard fork to officially merge its two blockchains and transition to Proof-of-Stake.
Other major altcoins also experienced declines ranging from 5% to 15% over the past 24 hours.
According to liquidation data, nearly $300 million in derivative positions were liquidated in the last 12 hours, primarily affecting BTC, ETH, and Ethereum Classic (ETC) — an altcoin that has surged recently due to The Merge hype. Long positions accounted for 84% of the liquidations.
Value of Liquidated Cryptocurrencies in the Last 12 Hours, Data from Coinglass as of 08:05 AM September 7, 2022
The cause of the latest market dump remains unclear. This could be another instance of September being an "unlucky" month for Bitcoin and the crypto market, as BTC has historically experienced sharp declines in September due to "black swan" events. Notably, on this date last year (September 7, 2021), Bitcoin underwent a massive sell-off, losing nearly $10,000 in value after El Salvador officially recognized BTC as legal tender.
Looking ahead, as Coin68 has reported, the crypto market will face several other significant news events that could impact prices. Besides The Merge, on September 13, U.S. inflation data for August will be released, followed by Cardano's Vasil hard fork and the Fed's interest rate meeting at the end of the month.
Additionally, a piece of traditional financial news that might affect the crypto market is Russia's recent suspension of the Nord Stream 1 gas pipeline to Europe due to the conflict with Ukraine, threatening the energy stability of EU countries as winter approaches.
