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Saturday, September 9, 2023

Ethereum Jumps 30% Following Overnight Dip But Analysts Warn Of Further Downside

Ethereum has been experiencing a roller coaster ride over the past few days. But it went through an immense bull phase in the last 24 hours as the crypto broke free from its range-bound trading in the $700 region and burst past the $1,000 mark.

This reversal in fortune could gain Ethereum some parabolic momentum that has put an end to the consolidation phase and underperformance against Bitcoin that has previously plagued its price action.

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The price of Ethereum climbed to a high of $1,150 on June 19, experiencing an increase of 30% in a matter of a mere two days. But the start of the fresh weekly session on the 20th saw ETH/USD pair reveal a hint of letting go of its gains made over the weekend. Its price again saw a plunge, moving down 9% from its $1,150 perch.

Noted analyst PostyXBT noted that there was a need to be cautious around the latest rally by Ethereum and said that it amounted to a possible clean fake-out, indicating that it appeared to be deliberately misleading. PostyXBT shared in his post that it seemed like a chance to go for $1,250 though Bitcoin was yet to regain its level.

US Central Bank Policy Further Hurting Ethereum And Other Cryptos

Ethereum along with top cryptocurrencies such as Solano, Cardano, and Bitcoin have all been in the grip of a bear market of late. ETH/USD is 77% lower than its highest level of $4.951. Other tokens are also down as much as 90% from the peak they reached in the last quarter of 2021.

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Concerns remain over the hawkish policy adopted by the Fed to rein in inflation. This has fired up the sell-offs and has hurt both the traditional stocks and the cryptocurrency market in tandem.

The American central bank has also revealed plans for a benchmark hike in 2023 to rein in the runaway inflation rate. This will cause many investors to have less liquidity to go for volatile assets such as Ethereum and Bitcoin.

The hint of a rate hike by the Federal Reserve in January led to cryptos crashing sharply. That was when it announced in November that it would go for tapering its purchase of bonds and also signaled higher interest rates would be on the way.

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