Ethereum Price Revisits Lowest Level in Two Months Amid Silvergate’s Contagion Fears and Macro Concerns

Ethereum price has been on a steep decline for the past few days, breaking out below the crucial support level of $1,500. ETH has plunged nearly 15% in the past week and more than 9% in the past 24 hours. The largest altcoin by market cap has slipped to its lowest level since early January.

Fundamental Analysis

Ethereum price has been in the red for the past few days against the backdrop of Silvergate’s collapse and macroeconomic concerns. Over the last day, ETH’s total market cap has crashed by 8.56%, while the total volume of the altcoin traded jumped 60.73% on the back of increased selling pressure.

Things have not been good for the crypto market in the past week as many events continue weighing on its overall performance. The global crypto market cap has plunged by more than 7% in the past 24 hours to $923 billion. The total crypto market volume has increased by more than 57% over the past day.

Cryptocurrencies have been reacting to Silvergate’s crisis as contagion fears spread throughout the market. The crypto-focused bank announced on Wednesday that it will be winding down its operations and liquidating its bank. This will be the next biggest failure in the crypto sector following FTX’S collapse and Terra’s LUNA meltdown. The company’s announcement kept investors on their toes, prompting a huge sell-off in the crypto market.

Investors have also been jittery about a potential hike in interest rates. Fed chair Jerome Powell recently announced that the US central bank is likely to increase its interest rates to higher levels than previously anticipated to combat high inflation rates. Higher interest rates are usually bad for riskier assets such as cryptocurrencies.

Additionally, US President Joe Biden recently talked about cryptocurrencies when announcing his 2024 budget plan. In his statement, Biden suggested deploying a new 30% tax on crypto-mining electricity as well as a clamp down on crypto wash sales.

Ethereum Price Prediction

Despite being on a consecutive downward trajectory for the past few days, Bitcoin and Ethereum are the biggest drivers of the crypto price action. At the time of writing, Ethereum price was trading 3.43% lower at $1,388, after hitting an intraday high of $1,437.50.

On the daily chart, the ETH price has moved below the 25-day, 50-day, and 100-day moving averages. It has also remained below the 50-day and 200-day exponential moving averages. Its Relative Strength Index (RSI) has slipped into the oversold region on the back of increased selling pressure.

As a result, the Ethereum price is likely to continue falling as traders and investors remain jittery. If this happens, bears are likely to pull back the price further to the next key support levels at $1,350 and $1,290. The next major resistance level will be at $1,500.

ETH Price Chart

Leave a Reply

Your email address will not be published.