Why is ethereum down so much
Just another PoS blockchain? Also, if something goes wrong because of the The Merge, that could lead to a notable liquidity drain, which in turn could lead to DeFi prices becoming incredibly volatile. There is also the matter of non-fungible tokens NFTs. Since most, if not all, NFTs are based on Ethereum, the potential for a variety of forks could make it confusing for some NFT holders to know exactly what they own and where exactly that is.
That could, in turn, lead to a growth of NFT scams, with items listed for sale which are not, in fact, for sale. It is not just within the NFT market that we face the possibility of scams, though, as there remains the possibility that falsely declared airdrops and support scams could rob people of their money.
Ethereum price prediction What is the outlook for the Ethereum price following The Merge? Keep in mind that price forecasts are often wrong. As such, analysts and algorithm-based forecasters can and do get their predictions wrong. If you are considering investing in cryptocurrency tokens, we recommend you conduct your own research.
Look at the latest market trends, news, technical and fundamental analysis, and analyst opinions before making any investment or trading decisions. Keep in mind that past performance is no guarantee of future returns, and never invest any money that you cannot afford to lose.
FAQs Is Ethereum a good investment? In volatile, high-risk cryptocurrency markets, it is important to do your own research on a coin or token to determine if it is a good fit for your personal investment portfolio. Whether ETH is a suitable investment for you will depend on your risk tolerance and how much you intend to invest.
Many crypto insiders believe investors might want to look at macroeconomic factors like inflation and government regulations of cryptocurrencies to help determine their investment strategies for the rest of this year. Instead, as these latest moves reiterate, many cryptocurrencies, and ETH, in particular, have begun moving in tandem with high-risk stocks like those listed on the tech-heavy Nasdaq.
In inflationary environments, many investors will retreat to commodities like oil and gold and tend not to be as interested in riskier investment vehicles like tech stocks and cryptocurrencies. Many eyes are also on the U. Ethereum Volatility Ethereum, like all cryptocurrencies, has proven to be an extremely volatile investment, and rapid price fluctuations can be set off by the smallest bits of news. McMillan advises investors to consider cryptocurrencies like Ethereum, similar to Nasdaq stocks in the late s.
Of course, with any high-risk investment like cryptocurrency, investors should remain aware of risks and not invest more than they can afford to lose. Ethereum and other cryptocurrencies are volatile, high-risk investments that can quickly shift directions.
Investors must always do their due diligence and be prepared for the volatile nature of these investments. Was this article helpful? Send feedback to the editorial team Rate this Article.
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Ethereum Had a Rough Start to Ethereum got off to a rough start in Some of this downward pressure has certainly resulted from investors correlating Ethereum and other cryptocurrencies with riskier tech stocks , which have seen a great deal of downward momentum this year.
When the broader market is down, cryptocurrencies follow suit. High-risk investments can see tremendous price swings and extreme volatility. However, even compared with the tech-heavy Nasdaq, which is full of high-risk growth stocks. As a relatively new asset class, nobody knows what the future holds for cryptocurrencies as investment vehicles. Predicting their price moves is very challenging.
Cryptocurrencies are also subject to hacks and future regulations, which may affect their overall value. If an investor chooses to invest in Ethereum, they should consult a financial advisor first and never invest more than they can afford to lose.
Maybe we weren't expecting ETH to melt faces straight away, but surely this is not going according to plan? Interestingly, as Bloomberg's crypto market analyst Jamie Coutts analyzed, demand-side metrics actually improved following the Merge. Active addresses increased, as did transaction count: Coutts notes that active addresses are in the 87th percentile compared to the last three years 64th percentile for tx count.
In other words, since October , only four out of 36 months had more active Ethereum addresses than now. But digging a little deeper shows where it's all going wrong. Why Ethereum is stuck in a rut If you take another look at the Ethereum Network Model, you can easily spot why its predictive ability is limited. Small wonder that the transaction value and active addresses were peaking at a time when everyone and their mother was chasing the next hot shitcoin.
However, only having an active address tells us little about the fundamental demand for Ethereum's commodity : blockspace. Demand for blockspace can easily be proxied by network fees. Since blockspace is a limited commodity, network fees will rise in times of high demand — but they have actually been falling for quite a while now: Network fees surged in the bull market and were flat during the bear market.
After another surge until mid, they have been sliding back to bear market levels since. In fact, zooming in on network fees tells us that the DeFi-powered bull market has faded away almost entirely. And no. Well, it's complicated. Firstly, the macro is to blame. Yes, here we go again. You can check our Bitcoin September Update for a recent update and our crypto bear market analysis for a big-picture explanation of what's happening.
Which means less demand for Ethereum blockspace, lower fees, and thus less demand for ETH itself. To quote Arthur Hayes , as long as the white line in the graph below doesn't go up more USD in the markets , the green and yellow lines won't react, and neither will ETH.
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Let's look into why ETH dumped post-Merge, what fundamentals have changed for the network, and what fundamentals still need to change if ETH is to deliver on five-figure price targets. Maybe we weren't expecting ETH to melt faces straight away, but surely this is not going according to plan? Interestingly, as Bloomberg's crypto market analyst Jamie Coutts analyzed, demand-side metrics actually improved following the Merge. Active addresses increased, as did transaction count: Coutts notes that active addresses are in the 87th percentile compared to the last three years 64th percentile for tx count.
In other words, since October , only four out of 36 months had more active Ethereum addresses than now. But digging a little deeper shows where it's all going wrong. Why Ethereum is stuck in a rut If you take another look at the Ethereum Network Model, you can easily spot why its predictive ability is limited.
Small wonder that the transaction value and active addresses were peaking at a time when everyone and their mother was chasing the next hot shitcoin. However, only having an active address tells us little about the fundamental demand for Ethereum's commodity : blockspace. Demand for blockspace can easily be proxied by network fees.
Since blockspace is a limited commodity, network fees will rise in times of high demand — but they have actually been falling for quite a while now: Network fees surged in the bull market and were flat during the bear market. After another surge until mid, they have been sliding back to bear market levels since.
In fact, zooming in on network fees tells us that the DeFi-powered bull market has faded away almost entirely. And no. Well, it's complicated. Firstly, the macro is to blame. Yes, here we go again. You can check our Bitcoin September Update for a recent update and our crypto bear market analysis for a big-picture explanation of what's happening. Which means less demand for Ethereum blockspace, lower fees, and thus less demand for ETH itself. These moves signaled investor willingness to return to risk assets in hopes of a potential easing of interest rates by the Fed.
However, as more earnings reports surfaced at the end of the trading day, investor sentiment about the broader market shifted. Crypto, however, remained strong. This is a bullish price prediction, and several factors could affect it. Many crypto insiders believe investors might want to look at macroeconomic factors like inflation and government regulations of cryptocurrencies to help determine their investment strategies for the rest of this year.
Instead, as these latest moves reiterate, many cryptocurrencies, and ETH, in particular, have begun moving in tandem with high-risk stocks like those listed on the tech-heavy Nasdaq. In inflationary environments, many investors will retreat to commodities like oil and gold and tend not to be as interested in riskier investment vehicles like tech stocks and cryptocurrencies.
Many eyes are also on the U. Ethereum Volatility Ethereum, like all cryptocurrencies, has proven to be an extremely volatile investment, and rapid price fluctuations can be set off by the smallest bits of news. McMillan advises investors to consider cryptocurrencies like Ethereum, similar to Nasdaq stocks in the late s. Of course, with any high-risk investment like cryptocurrency, investors should remain aware of risks and not invest more than they can afford to lose.
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