Ether prices recently fell to a more than two-month low at a time when many investors expect central banks to continue raising benchmark rates to bring inflation under control.
The second most valuable digital currency as measured by total market capitalization fell earlier today to $1,280.00 trading view,
At this point, the cryptocurrency is down more than 10% in the past 24 hours, trading at its lowest level since mid-July, additional TradingView data shows.
Following this decline, the digital asset was trading with volatility near $1,350 at the time of writing.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
challenging market conditions
Explaining these latest price movements, market observers said that there are some reasons for the bullishness.
Furthermore, he emphasized widespread expectations that central banks will continue to tighten monetary policy, a development that could provide headwinds for cryptocurrencies.
Ethereum’s so-called merger, which transformed the platform from proof-of-work to proof-of-stake, generated significant visibility, but ether, the platform’s native digital currency, fell more than 10% on the day of the event.
Tim Enneking, Managing Director digital capital managementexplained this pullback very simply, stating that it was a “complete, textbook example” of “buy on rumours, sell on news”.
“With the merger now, there are no significant milestones ahead that can act as a catalyst,” said CEO of cryptocurrency hedge fund manager Joe DePasquale. Bitbull Capital,
Web3 tech lawyer Andrew Rosso offered a slightly different approach.
“While I agree that the crypto market is lacking some bullish factors at the moment, we must remember the inflationary environment we are in now – macros will almost always win, as interest rates are about to rise again, ” They said.
Marouane Garcon, cofounder of cross-chain decentralized exchange whale swapIt also weighed in while describing a situation where many investors have taken a “wait and see” approach.
“I agree that there is not much to be bullish on at the moment and I think everyone is waiting for bad news from central banks,” he said.
central bank concerns
If central banks implement further increases in their benchmark rates, the growth would put upward pressure on borrowing costs, potentially creating headwinds for cryptocurrencies by offering higher returns to interest-bearing assets and therefore for investors. will increase their appeal.
Market observers expect the FOMC to announce another major rate hike, although the size of this increase remains to be seen.
Analysts working for investment bank Nomura recently predicted that these policy members would increase the federal funds rate by 100 basis points, citing the need for aggressive action from the central bank, Reuters. informed of earlier this month.
“For the time being, we have highlighted the emergence of a wage-price spiral and increasingly uncontrolled inflation expectations, which could drive inflation persistently over the long term, necessitating a more forceful response from the Fed,” analysts said in a note. Is.”
However, the data collected from CME Fedwatch Tool At the time of this writing an 84% probability was indicated that the FOMC member would increase the central bank’s critical rate by 75 basis points.
The resource only predicted a 16% chance that these rates would rise by 100 basis points as a result of the upcoming meeting.
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether, eos and sol.
Credit: www.forbes.com /