The price of Ether (ETH) fell on Tuesday following the fall of Bitcoin (BTC) to less than $30,000.
The ETH/USD pair fell 5.41% – an intraday low of $1,720. That is, about $400 above the historical top recorded in 2018 – which should serve as an important level of psychological support.
On Sunday, the pair’s offer rose to $1,994 on Coinbase. At that time, its price movement looked very similar to Bitcoin. The largest cryptocurrency on the market hit $32,450, but later corrected it to $29,507 during Tuesday’s session.
The downfall also came after the departure of the network’s co-founder Anthony Di Iorio from the cryptocurrency industry, citing, in part, personal security concerns. Di Iorio, who is probably a great Ether holder, hinted to Bloomberg in an exclusive interview that would liquidate all of their positions in cryptocurrencies, not specifically mentioning the native token of the blockchain Ethereum.
“[Cryptomoedas são] just a small part of what the world needs,” he said, adding that he wants to “diversify so as not to be a cryptocurrency guy, but to be a guy who faces complex problems.”
FOMO of the snubbed hard fork?
The latest sales wave has surfaced despite the new Ethereum network update. nicknamed as london hard fork, the major protocol code update is yet another step towards transforming Ethereum into a faster and more scalable proof-of-stake network than a power-hungry proof-of-work network.
But the most talked about feature of the new hard fork is deflation. The update hopes to burn a portion of the base fee paid to minderators, thus reducing the circulating Ether supply. Education platform CoinMonk noted in March that upgrading the London hard fork could ideally burn 1 million ETHs in 365 days, which is almost 1% of the network’s total.
Grayscale, a New York-based digital asset investment firm, also wrote in a report February that deflationary dynamics would turn out to be extremely positive for the Ether value. The ETH/USD pair rose nearly 180%, reaching a record $4,385 after the report was published.
The latest downturn in the markets has raised serious concerns about the London hard fork’s ability to maintain the Ether’s bullish bias. For example, TradingView analysts said in their updates that inflationary pressures in the US market may have boosted sentiment for the ETH/USD pair.
The US Department of Labor released last week the Consumer Price Index (CPI) report for June. The latest data showed that US inflation rose from 0.9% to 5.4% in June, the fastest rise since the 2008 financial crisis. Bitcoin and Ether prices fell after the report was released.
“Typically, cryptocurrencies are seen as an inflation hedge by digital asset investors,” wrote TradingView analysts, adding:
“However, in this case, the data itself matters less than what the Federal Reserve can do in response to it. Traders have started selling cryptocurrencies such as Ethereum and Bitcoin out of fear that the continued rise in inflation would prompt the Fed to resume its interest-raising policies.”
bull to the end
But not everyone is pessimistic. For example, Konstantin Anissimov, executive director of the CEX.IO exchange, forecasts Ether prices to hit $3,000 after the London hard fork.
“As things stand, the Federal Reserve has increased the size of its balance sheet from early 2020 to more than $8 trillion – a substantial increase,” he said, adding that lower prices in cryptocurrency markets are an opportunity for investors protect themselves beyond the safe havens of traditional markets.
“Investors could accumulate discounted coins, relying on their properties to protect against inherent inflation. Both currencies, with renewed purchases, will likely retest price levels at $45,000 and $3,000, respectively. ”
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com.br Every investment and trading move involves risk, you must conduct your own research when making a decision.
Since 2019, no such clear purchase window appears. Trade over 400 pairs of cryptocurrencies at a 0% rate until July 8th at OKEx.