Ethereum fails critical test, this will be the new price

The crypto market has crashed in the past 24 hours. However, Ethereum prices drop much more than Bitcoin. Ethereum has fallen nearly 8% in the past 24 hours and is trading at $1.34k. More importantly, the slide doesn’t seem to be stopping yet. ETH continues to drop nearly 1% in the past hour.

According to Kevin Svenson, a major crypto influencer and analyst, Ethereum failed to hold up critical support. If ETH continues to fall, it may go down to $1,000.

Why is Ethereum falling

Ethereum has achieved a very successful merger. Experts believe that achieving such a large-scale software upgrade is remarkable. However, ETH prices fell after the merger. Many experts note that the merger could be a “sell the news” event. Since the achievements of the merger are long-term, they may have a disappointing response.

Experts also point out that the merger was carried out under the worst possible macroeconomic conditions. August’s consumer price index showed worse-than-expected inflation. The Fed, which was already taking a hawkish stance, has become even more hawkish. The market is also pricing in the possibility of an interest rate hike of 100 basis points. However, the Fed will likely continue with an expected 75 basis point hike.

Elon Musk, CEO of Tesla, believes another major Fed hike will lead to deflation. Cathie Woods of Ark Investments also has the same annoying notion of economics. Meanwhile, the World Bank estimates that the market will face a recession next year. They believe that the recession is the result of the aggressive monetary policies of major economies.

FedEx also warned of a recession as the demand slowdown accelerates.

When will Ethereum rebound

The price of Ethereum and other cryptocurrencies will depend on the next interest rate hike on September 21. If the FOMC goes ahead with another 75 basis point hike, chances are the move will already be priced in. As a result, markets may rebound.

If, however, the Fed goes for a hawkish 100 basis point hike, it will likely lead to a sharp correction.

Nidhish is a technology enthusiast, whose goal is to find elegant technical solutions to solve some of society’s biggest problems. He is a firm believer in decentralization and wants to work towards the widespread adoption of Blockchain. He is also passionate about almost every popular sport and likes to converse on a wide variety of topics.

The content presented may include the personal opinion of the author and is subject to market conditions. Do your market research before investing in cryptocurrencies. The author or publication assumes no responsibility for your personal financial loss.

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