On June 19, as the continuing sell-off in the cryptocurrency market extended into the weekends. The price of Ether (ETH), the native token of Ethereum, plunged below $1,100. Ether fell to $985, its lowest point since January 2021. Concerns over the Federal Reserve’s 77 basis point rate rise, which sent cryptocurrencies into a severe bear market, coincided with the decrease.
An expert from the centralized data Microeconomics warns that more declines are unavoidable. Even if the Federal Reserve has just recently begun hiking rates and, for the record, hasn’t sold anything on its balance sheet either.
The collapse of Ethereum
Recently, traders and investors have been closely monitoring the price of Ether out of concern that a clear drop below $1,100 would compel them to liquidate heavily leveraged positions. This would increase the deflationary pressure on Ethereum.
The two cryptocurrency loan services Celsius Network and Babel Finance, which stopped withdrawals due to “market volatility. It seem to be to blame for the worries. They became more intense. A cryptocurrency hedge fund with assets worth $10.1 billion, failed to strengthen its collateral to support aggressive bets. The $40.5 billion algorithmic stablecoin project Terra crashed less than a month prior to this.
How low can the price of ETH go?
Long-term negative movements in the Ether market are predicted by the Fed’s hawkish policies and the continuing collapse of the DeFi market. Technically, ETH’s price has to recoup $1,100 in order to reestablish its psychological support. If this level is broken to the downside, the token may then set its sights on $830. In February 2018, the same level acted as resistance before an 89 percent drop to about $81 in December 2018. If Ether’s drop is like its bear cycle from 2018, ETH/USD might drop as low as $425.