This appears to be a warning sign for the coin now holding the second-largest market capitalisation. ETH's price started 2023 at $1,200, down from $3700 a year earlier, a drop of up to 67.5% after more than a year.
With the expectation that the Ethereum network will undergo more changes once it switched to the Proof-of-Stake (PoS) mechanism, Ether had its greatest surge in the past year before The Merge update.
The Merge is the Ethereum blockchain's switch from a Proof-of-Work (PoW) network that relies on mining to a more scalable, energy-efficient PoS system.
The Ethereum Mainnet, which has been operational since Genesis, and its brand-new Proof-of-Stake consensus layer, the Beacon Chain, were combined during the Ethereum Merge. It made it unnecessary to use energy-intensive mining and allowed the network to be secured with staked ETH instead.
But when the Terra catastrophe sent the market into the red, Ether didn't bounce back until August 14, when it went from its yearly low of $886 to $2,000. Since that time, this price hasn't been seen until the end of 2022.
It is clear that 2022 will not be a flawless year for Ether; in fact, the network's decentralized finance (DeFi) sector has experienced a significant fall. According to DefiLlama, the network's total value lock (TVL) on this day last year was $95.4 billion for Ether, but it is now only $22.8 billion.