Ethereum tries to carve its own path thanks to its positioning as a key cryptocurrency in the future of the metaverse and its involvement in projects such as decentralized finance (DeFi) and NFTs, but for now, it cannot move away from the shadow of bitcoin.
In a week in which bitcoin has suffered a collapse that in the early stages of Friday has left it at levels not seen in the market since September, 41,324 dollars, ethereum has drawn a very similar trajectory, falling to 3,100 Dollars.
As with bitcoin, the $ 3,100 marked by ethereum during the morning of Friday, January 7, was not seen on the cryptocurrency graph since the end of September, a month that ended at about $ 3,000 that served as a starting signal. to all-time highs of $ 4,800 reached in early November.
From that peak, ethereum has lost around 30 percent, following a very similar trajectory to bitcoin and seeing how around 200,000 million dollars of its market capitalization.
The Fed also accelerates the sale of ethereum
The association of ethereum with the overall volatility of crypto assets has been clearly appreciated this week, in which the cryptocurrency market has been shaken by the news from the U.S.
Crypto assets have traced since Wednesday a parallel path to the falls suffered by both Wall Street and the IBEX 35 after knowing the content of the minutes of the last Fed meeting, which have anticipated a faster rate cut than was initially expected by the US central bank.
Investors’ aversion to risk in the face of this hasty rate hike led to a flight from risky assets to safer assets, such as fixed income bonds that could benefit from this stance hawkish from the Fed.
Ethereum did not escape this exodus, and throughout that day on Wednesday marked by the news of the Fed, it fell 10 percent from $ 3,800 to just over $ 3,400.
The rest of cryptocurrencies do not escape the fall
Far from moderating its fall after the initial shock caused by la Fed, Ethereum has continued to draw a downward curve that has only shown signs of lateralizing to stop the hemorrhage after having marked the 3,100 dollars that placed it in September records.
Around 2 p.m. on Friday ethereum had slightly improved its valuation, rising to about $ 3,200 which is a small improvement of 4.5 percent.
By broadening the focus to the other three cryptocurrencies that occupy the top 5 crypto assets by market capitalization, it can be seen that el binance, solana y cardano they have also suffered corrections in their value.
In the case of binance, the decrease has been 12.9 percent in the last week, a cut that increases in the case of solana, which has fallen 19.64 percent. Investors in cardano, meanwhile, have seen that decline moderate to 9 percent.
The future of ethereum
The generalized fall of cryptocurrencies during this first week of 2022 has led investors to wonder what future holds for Ethereum, which previous reports such as that of Goldman Sachs they were even putting in the 8,000 dollars at this point.
Despite the failure to comply with these forecasts, experts such as Paul Brody, leader of the global blockchain division of the consultancy EY, have reaffirmed a position that 2022 “will be the year of ethereum” that organizations such as JP Morgan.
“By the end of 2022, ethereum will primarily be a blockchain that is used for other blockchains to interact with each other,” Brody explains in an article.
In other words, ethereum should evolve into a role as the engine of a platform that accommodates other crypto assets, and increases their value in the wake of them.
Until then, however, it continues to be dragged by the ups and downs of digital currencies, without managing to distance itself from market trends.
We would like to say thanks to the writer of this short article for this outstanding material
Ethereum does not escape the crash of bitcoin