The price of Ethereum (ETH) has experienced a sharp drop as stability doubts dissipated as the Ethereum blockchain proof-of-stake (PoS) merge approaches.
At the time of writing, ETH is trading at $1,853.44, down 5.78% after retracing from the daily high of $1,976.57.
The Ethereum Beacon chain which was supposed to introduce PoS in the blockchain went through a deep 7-block restructuring in the last 24 hours.
Block reorganization occurs when there is an inconsistency in the ordering of blocks that mainly results from malicious activities or bugs.
The block reorganization in Ethereum was the result of a bug indicating that the shift to Ethereum PoS may not be stable, as advocated by Ethereum co-founder Vitalik Buterin.
Ethereum stability doubts
Although the recent restructuring was limited, Ethereum developers are still trying to establish the cause, so far, they have confirmed that the blockchain was not attacked.
Gnosis founder Martin Kopelman said Buterin could be very optimistic that the restructuring would improve stability if Ethereum moves to PoS.
Kopelman said:
“We haven’t seen 7 block reorgs on the Ethereum mainnet in years.”
However, he commended the Ethereum community for acting so swiftly in finding the cause and solution of the issue.
In addition, blockchain shift POS is expected this year to increase blockchain accessibility. Buterin expects this change to happen by August 2022.
future of ethereum markets
The Ethereum futures market is on volatile ground, with some options contracts expiring this week.
Over the past 12 hours, the coin has experienced a huge amount of liquidations, around $118 million which is twice as much as bitcoin. About 97% of these were long positions, indicating that traders were ready for an Ethereum recovery.
However, the expected recovery is yet to take place as ETH is lagging behind in the crypto market. Its losses came after a Federal Reserve meeting that showed some central bank officials had suggested further hikes in interest rates this year.