You guys may be thinking that after Luna, Ethereum is going to be RIP soon, right?
Since April 4 the price is come down from $3500 to $1200 as of today, and its a huge drop that cause chaos in the crypto market.
What Exactly Happened?
Ethereum is currently into process of transitioning from proof-of-work to proof-of-stake consensus mechanism. The actual transition is expected to take place in august the process is named as merge. Last week the eth developers did a dry on on one of the longest running Testnet called Ropston, the merge was successful but eths price started declined by that time. There were many bugs in the merge process, and the merge did not went as smooth as planned by many investors, this presumably led to fear that the actual merge be delayed.
When eth developers agreed that it will take more 2- 3 months before the actual process, suggesting there is more work to happen before actual merge can happen.
Due to these difficulties in merge and time delays all the leverage traders who were looking to go long on back of the Ropsten merge liquidated causing eths price to decline.
The price of Lido Staked Ethereum (stETH) has diverged sharply from the price of Ethereum (ETH) in the last 48 hours. Theoretically, however, the stETH token in supposed to trade at a 1:1 peg to ETH.
While st eth is facing liquidity risk in short term it is inherently different from terra's ust, it does not face same death spiral risks, because each st eth is redeemable for 1 eth as soon as merge is completed and unstaking is enabled.