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Ethereum Under Intense Selling Pressure 

The outcome of yesterday’s FOMC meeting triggered a general downturn in the cryptomarket, with ETH dipping to the $3.45K levels.

Fundamental News Will Always Impact The Crypto Market

Traders must now realize that economic news by governments will always have a direct effect on the prices of digital assets. Highlights of the latest FOMC meeting, which became public knowledge yesterday, showed that the Fed was more dovish than previously anticipated. Thus, indicating that the Fed may start increasing interest rates beginning from the next 60 days.

Furthermore, the Fed may likely sell treasuries (decrease its balance sheet size). When this happens, the rates are bound to increase and cause intense selling pressure on risky assets such as cryptocurrencies. Hence, it is no wonder that the leading cryptos are down following the FOMC highlights released on January 5.

The top seven digital currencies have lost an average of 9% overall over the past 24 hours. The best solution is for crypto traders to be constantly updated on the news related to the American bond market. As the rates become higher, digital assets become more bearish.

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Also, if the current course of action over the treasury yields doesn’t stop, selling pressure on the digital currencies may not stop. Investors must also realize that ETH isn’t immune to this economic news because there are now more institutional holders of Ethereum than crypto enthusiasts. Hence, ETH (like other broader crypto markets) will continue to dip in price as rates keep surging.

ETH’s Dominance In DeFi Will Soon Be Over – Jpmorgan Analyst

Nikolaos Panigirtzoglou, a top JPMorgan analyst, has claimed that Ethereum will soon lose its number one position in the DeFi space. In his report of recent research, the analyst remarked that the loss in dominance would result because the network’s plans to scale by 2023 will be too late as other networks would have grown and taken over the DeFi space.

ETH dominance decrease. Source: Defilama

A recently released DeFilama data showed that ETH’s dominance over the DeFi market has declined by nearly 35% in the last 12 months. According to the data, ETH’s dominance was over 97% as of January 2021 but was 64% as of December 2021. The primary cause of the decrease is the rise in the number of its competitors, notably Solana and Terra. Panigirtzoglou remarked that if this dominance decline can happen within 12 months, it is left to imagine what can happen in another 12 months.

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ETH Price Movement

ETH price chart. Source: FXempire

After hitting its next support at the $3.58K levels, ETH declined further towards its next crucial support of $3.28K. Another dip below this $3.28K will mean that the second leading digital currency will find its next support at the $3.18K range. A further decline beyond this level will mean a test of the $3.07K support.

Conversely, if the bulls regain control of this asset, Ether’s next crucial resistances will be the $3.58K and $3.72K levels. A move above these resistances means that ETH will move to cross over the 20 EMA, which will coincide with the $3.82K price level.

Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

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