Will Ethereum fall further? Yes, Ethereum could fall further
Why Ethereum crashed this year
- Cryptocurrencies started to fall after the US inflation rate broke above the key level of 6%. This is in turn linked to many factors including crude oil prices. See how crude oil prices rose in the first 6 months of the year. It is the exact mirror of Ethereum prices. While mirroring is random as there are other factors as well, but this is an important metric to track if we are to predict when Ethereum will rise.
- Scams in the global cryptocurrency industry: in the last 6 months, two major crashes – Luna and FTX have brought the industry to its knees by triggering greater regulation of how cryptocurrencies could operate in the future
- The global economy is deteriorating: the US Fed seemed to suggest two months ago that they had finished raising rates. However, with the Chinese and German economies deteriorating rapidly as OPEC countries cut output to raise prices to manage their balance sheets, the Fed chairman seems to suggest that further rate hikes may be needed. This is a huge negative for cryptocurrencies since liquidity is compressed.
Will Ethereum fall further?
Yes, Ethereum will fall further. That’s why
- The extent of the damage due to FTX is still unknown. Genesis reported that it is also in trouble and this emerged 2 weeks after the FTX crisis. There could be more in sight
- The US economy continues to deteriorate and it is difficult to say that this is the bottom. While the inflation rate has fallen, it is far above 6%
- The Fed has yet to signal that it will not stop raising rates. Liquidity will continue to be a problem, never a good thing