The crypto market wilted on Tuesday as geopolitical tensions zapped investor risk appetite and excitement around Ethereum’s merge began to deflate.

At 07:00 UTC, apex cryptocurrency bitcoin (BTC), traded at $22,870, down 1.8% on a 24-hour basis. While Ethereum’s ether (ETH) nursed a 5% loss at $1,586, names like FIL, EOS and ICP fell at least 10% . The total market capitalization was down 3% at $1.09 trillion, according to CoinDesk data.

Traditional markets were equally risk averse, with the dollar gaining ground against major fiat currencies, except the yen, alongside losses in the equity markets. The futures tied to the S&P 500 fell 0.3%, hinting at a downbeat start on Wall Street.

The source of market unease was Beijing’s warning to the U.S. House of Representatives Speaker Nancy Pelosi against visiting Taiwan – a self-ruled island claimed by China – during her tour of four Asian countries that began on Monday.

“There will be serious consequences if she insists on making the visit,” Chinese foreign ministry spokesperson Zhao Lijian warned. “We are fully prepared for any eventuality. The People’s Liberation Army [PLA] will never sit by idly. China will take strong and resolute measures to safeguard its sovereignty and territorial integrity.”

Per local media in Taiwan, Pelosi was rumored to arrive at Taipei Songshan Airport on Tuesday at 10:20 pm local time (14:20 UTC).

“We might see [ether falling to] $1,500 today, with Nancy Pelosi stopping over in Taiwan,” Markus Thielen, chief investment officer at British Virgin Islands-based IDEG Asset Management (IDEG), said in an email. Geopolitical tensions are hard to predict and often trigger knee jerk reactions in risk assets. While markets were down, losses were moderate, perhaps on belief that central banks would slow down or abandon tightening if the geopolitical tensions escalate.

Thielen cited the fading enthusiasm about the Ethereum merge as another catalyst for the expected price drop in ether and the broader market. Merge, the supposedly bullish upgrade, combining Ethereum’s current proof-of-work blockchain with a proof-of-stake blockchain called the Beacon Chain, is projected to happen in September. Ether picked up a strong bid, lifting the battered crypto market higher after Ethereum developer Time Beiko announced September as a tentative date on July 14.

“ETH moves appear to lose momentum and google trends indicate that ‘searches’ for Ethereum merge have flattened out. So the positive newsflow is taking a backseat,” Thielen said.

Google Trends, a widely used tool to gauge general or retail interest in trending topics, showed a value of 71 for the worldwide search query “Ethereum merge” run over the week ended July 31. That’s significantly lower than the peak value of 100 observed during the preceding week.

Google Trends data showing the level of general interest in Ethereum merge (Google Trends) (Google Trends)

Google Trends provides a mostly unfiltered sample of actual search requests made to Google and scales their searches on a range of 0 to 100, according to the company. The search value represents the search interest relative to the highest point on the chart for the selected region and time.

While the so-called merge trade powered a double-digit recovery in both ether and broader market capitalization last month, the move supposedly lacked fundamental support – yet another reason for bulls to be cautious.

“During the last 1 month, ETH price [jumped] +68% while [Ethereum’s] total revenue [fell] -47% (minus !), the higher market cap doesn’t justify the negative growth in revenue,” Thielen noted.

From a technical analysis standpoint, both ether and bitcoin were losing ground owing to overbought conditions and faced the risk of a more profound decline.

“Our short-term [bitcoin] indicators are mixed, but a greater loss of short-term momentum would support a retest of support (~$18,300-$19,500), below which secondary support is near $13,900,” Katie Stockton, a chartered market technician and founder and managing partner of Fairlead Strategies, wrote in a weekly analysis published Monday. “Intermediate- and long-term momentum indicators are still pointing lower, increasing risk of another significant downdraft in the months ahead.”

Stockton mentioned $25,000 in bitcoin and $1,733 in ether as levels to beat to revive the bullish bias.

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