Ethereum's Merge won't stop its price from sinking without more users

cointelegraph.com:

Ethereum’s long-awaited Merge took place in September, shifting it from a legacy proof-of-work (POW) model to the sustainable proof-of-stake (PoS) consensus algorithm. Many observers expected Ether’s (ETH) price to respond positively as its daily emissions declined 90% with the halt of mining operations. 

However, the expected price surge never occurred. In fact, Ether has been down by over 7% since the upgrade. So why didn’t the Merge drive up the coin’s price?

Ethereum’s monetary policy was simply to reduce the token’s supply to 1,600 ETH per day. The PoW model, an equivalent of 13,000 ETH were emitted daily as mining rewards. However, this has been wholly eliminated post-Merge, as mining operations are no longer valid on the PoS model. Therefore, only the 1,600 ETH supply remains for staking rewards, cutting its daily supply by 90%. If the average gas price on the Ethereum network becomes at least 16 gwei, the 1,600 ETH would be burned every day, making Ethereum’s inflation zero or even triggering a deflation.

Related: Tax on income you never earned? It’s possible after Ethereum’s Merge

This monetary policy was a key driver for Ether’s price hike expectations. However, users didn’t consider the impact of marketing sentiment and regulatory changes. The deflationary model was established to impact ETH’s price long-term when the blockchain’s supply growth is in the negative zone.

The token supply growth since the Merge has been -0.01%, which means roughly the same amount of ETH was produced as the amount burned through transaction fees. Although this metric indicates deflation, it’s not substantial for increasing the token’s price — especially when liquidation remains high across the crypto marketplace.

Presently, ETH is