Today, the global cryptocurrency market is down by 5.89% over the past 24 hours to $1.19 trillion. This decline is mainly driven by Bitcoin and Ethereum. Bitcoin is down over 4 and trading around $28,000
Furthermore, Ethereum (ETH) dropped dramatically following a glitch in its proof-of-stake (PoS) plans, raising concerns about a planned merger.
ETH is down almost 9% in the past hours to $1,785, the lowest level since March 2021. Over the past 12 hours, it has fallen with a jump in liquidations.
Over the past 24 hours, the Ethereum beacon chain, which was supposed to add PoS to the blockchain, suffered a 7-block deep rearrangement. A block rearrangement occurs when a sequence of blocks has a misalignment, usually due to malicious behavior or a defect.
In this situation it was the latter. However, it also shows that the planned switch from ETH to PoS may not be as convincing as founder Vitalik Buterin had predicted.
Vitalik was very optimistic!
While the latest restructuring had little effect, ETH’s top engineers are still trying to figure out what caused it. They have established that this was not a blockchain attack until now.
However, Gnosis founder Martin Kopelman believes Buterin was overly optimistic when he suggested that switching to PoS would increase organizational stability.
Kopelman claims that to date, we have never seen a 7 block reorg on the Ethereum mainnet.
Kopelman, on the other hand, commended the Ethereum community for quickly organizing to identify the problem and find a solution.
Options expiration also affected the ETH futures market
The ETH futures market also went haywire this week due to the upcoming expiration of several options contracts.
The coin has seen an unusually high number of liquidations over the past 12 hours, amounting to around $118 million – more than double that of bitcoin. Almost all of these were long bets, indicating that traders were anticipating a rally in ETH.
But the expected rebound did not happen. In the past 24 hours, ETH has lagged behind the overall crypto market, with Bitcoin losing around 1.9%.
Its fall came minutes after a recent Federal Reserve meeting, which revealed that many central bank officials are keen to raise interest rates even higher this year.