Notably, Ether (ETH) dropped considerably against the U.S. dollar and Bitcoin (BTC) after the Merge. As of Sep. 22, ETH/USD and ETH/BTC trading pairs were down by more than 20% and 17%, respectively, since Ethereum's switch to Proof-of-Stake (PoS.

Multiple catalysts contributed to Ether's declines in the said period. First, ETH's price fall against the dollar appeared in sync with similar declines elsewhere in the crypto market, driven by Federal Reserve's 75 basis points (bps) rate hike.

Second, Ethereum faced a lot of flak for becoming too centralized post-Merge.

Only five entities produced 60% of the blocks so far. The biggest share belongs to Lido DAO, an Ethereum staking service, that has 4.19 million ETH deposited, or over 30% of the total amount staked into Ethereum's official PoS smart contract.

Third, institutional investors, or "smart money," also reduced exposure to the Ethereum-focused investment vehicles in the day leading up to and after the Merge.

Ethereum funds witnessed $15.4 million worth of capital outflows from their coffers in the week ending Sep. 16, according to CoinShares' weekly report. In contrast, Bitcoin-based investment funds attracted $17.4 million in the same week, suggesting capital migration post-Merge.

Lastly, Ether also felt extreme selling pressure from its proof-of-work (PoW) miners, who sold $40 million worth of Ether in the days leading up to the PoS update.

Independent market analyst Tuur Demeester noted that Ether could continue its decline versus Bitcoin in the coming days, citing ETH/BTC's previous reaction to key events in the Ethereum market, as shown below.

The chart shows Ether