Bybit: Reasons behind Ethereum price reduction

Ethereum (ETH)’s price has dropped along with other top cryptocurrency prices this morning, bringing it to an all-time low of 10 months. At the time of writing, Ethereum was down nearly 12% over the last 24 hours, and had dropped nearly 20% over the week as per CoinGecko information. Let’s check out the recent reviews about the price reduction of Ethereum. 

Ethereum reached a peak of more than $4,800 in November and is now trading at about $2,270. The second-largest cryptocurrency has fallen under the $2,500 mark several times during the year, however it is at the lowest price has been since July.

The reason why Ethereum’s price is falling

The Ethereum price prediction is similar to the general market for cryptocurrency. The top cryptocurrency Bitcoin (BTC) has also decreased by 8% this morning due to tightening economic conditions that continue to force people out of risky assets. The week before also saw considerable drops in the equities market. The Dow Jones and Nasdaq both recorded the biggest single-day declines since 2020, the Dow Jones losing over 1,000 points, and the Nasdaq down 5percent.

The primary reason for this loss is the federal reserve’s decision to raise rates by 0.5 percent this week. The Fed is working to reduce the soaring inflation rate, and raising rates is one of the tools that it has in its arsenal. This was the largest rate increase since 2000 and is expected to be the first of many.

There’s a risk that aggressive decisions by the Fed could cause a receding economic economy. If it does manage to get a “soft landing” and tame inflation, without causing an economic crisis A uncompromising Fed isn’t a good idea for crypto or other speculative investments. The ongoing geopolitical uncertainty can contribute to a skepticism towards risk.

Another issue that has weighed on the price of Ethereum is the delays in the coming merger with the Ethereum blockchain, which will switch from the energy-intensive proof-of-work model to proof-of-stake. It was originally scheduled to occur in June, however the community is now forced to wait for a few months. It’s likely that this was the cause to the current losses. However, it’s not a boost to the confidence of investors.

What does this mean for investors?

However, crypto investors must be prepared for losses that could be more severe in the near term. Numerous experts forecast further troubles for the market the leader Bitcoin as well as when Bitcoin is then the other crypto markets typically follows.

Every market has its upwards and downwards. When it comes to cryptocurrency, the fluctuations are more severe and come with more uncertainties. The crypto industry isn’t quite as well-tested and proven like, for instance, the stock market, and we aren’t able to point to years of price history as assurance that prices will rise. Furthermore, some prominent financial experts still believe that cryptocurrency prices could drop to zero, which makes it more appealing to take a loss.

But, if you are selling your Ethereum or any other cryptocurrency investments now, you’ll be able to lock in any losses. In addition you’ll not be in an advantageous position to gain from any eventual gains. Selling during massive drops is not a good way to make money. If you make investments for the long-term and remain invested throughout the tough times, it is more likely that you will be rewarded in the end.

Think about why you initially invested in Ethereum and whether that logic is still true. For instance, you could see the potential of intelligent contracts and believe Ethereum will remain a major player. The current market crash doesn’t alter this theory.

Bottom line

The dramatic price drop is difficult to take in even for the most knowledgeable investors. But, investing in assets over the long run is an effective way to create wealth. The most important thing is to take care of the risks involved with crypto. This means investing only money you can afford to lose and ensuring the crypto investment is part of your overall portfolio of assets. This way, you’ll be able to endure long periods of turbulent price fluctuations.