Ethereum Plunges 6% Amidst FUD Wave: Trump Attack, Fed Rate Cut Trigger Market TurmoilEthereum (ETH) price plummeted by 6% in the past 24 hours, falling from an intraday high of $2,425 on September 15th to a low of $2,260 on September 16th. This decline pushed ETH below the $2,200 support level, marking its lowest point since January this year
Ethereum Plunges 6% Amidst FUD Wave: Trump Attack, Fed Rate Cut Trigger Market Turmoil
Ethereum (ETH) price plummeted by 6% in the past 24 hours, falling from an intraday high of $2,425 on September 15th to a low of $2,260 on September 16th. This decline pushed ETH below the $2,200 support level, marking its lowest point since January this year. Additionally, ETH's price relative to Bitcoin has dropped to its lowest level since April 2021, indicating a more pessimistic market sentiment towards Ethereum.
This price crash occurred against the backdrop of a broader decline across the cryptocurrency market, with the total market capitalization dropping by 4.5% to $2.12 trillion within the past 24 hours. Ethereum emerged as one of the most significant victims of this market downturn, experiencing a steeper decline than the overall market.
Several factors contributed to the Ethereum price crash, including:
1. FUD Wave: Negative news and sentiment circulating on Ethereum X (formerly Twitter) severely impacted the market. Some developers and crypto industry observers made critical remarks about Ethereum, linking it to negative news.
2. Fed Rate Cut Expectations: The Federal Reserve is scheduled to announce its interest rate decision on Wednesday, September 18th. The market broadly anticipates a rate cut, which could negatively impact risk assets, including cryptocurrencies.
3. Trump Attack Incident: Former US President Donald Trump faced a second assassination attempt on September 15th but fortunately escaped unharmed. While it remains unclear whether this event directly impacted the ETH market, it sparked market concerns about political uncertainty, potentially exacerbating market volatility.
FUD Wave Engulfs Ethereum
Negative news and comments on Ethereum X appear to have catalyzed this price plunge. Several developers and crypto industry observers expressed concerns about Ethereum's future development and investment value.
Ethereum developer "antiprosynthesis" lamented in a September 15th tweet, "Half my feed is ETH FUD now." Economist Alex Krger compared Ethereum to Brazilian footballer Neymar Junior, hinting at Ethereum's faded glory. Cryptocurrency analysts JamesCheck and "KALEO" further joined the criticism of ETH, posting memes about its price drop and decline against BTC.
Meanwhile, "Crypto Dog" informed his 820,000 followers on September 15th that even Bitcoin Cash outperformed Ethereum last year. According to TradingView data, the ETH/BTC ratio currently sits at its lowest level since April 2021, reaching 0.038 on September 16th. This indicates declining market confidence in Ethereum.
Fed Rate Cut Expectations Trigger Market Concerns
The market broadly anticipates a rate cut from the Federal Reserve on Wednesday, September 18th. While rate cuts are generally perceived as good news for risk assets, Bitfinex analysts believe that a rate cut could push the cryptocurrency market down. This is because a rate cut could signal weak economic conditions, which would not be conducive to risk asset growth.
The CME FedWatch Tool shows a 41% probability of a 25 basis point rate cut and a 59% probability of a larger 50 basis point cut. This indicates a strong market expectation for a rate cut from the Fed.
Trump Attack Incident Adds to Market Volatility
While the Trump attack incident did not directly cause the Ethereum price drop, it has fueled concerns about political uncertainty and could amplify market volatility.
Following the first assassination attempt against Trump in mid-July, cryptocurrency prices surged significantly. However, the market reacted relatively calmly to the recent incident. This may be because the market has a clearer understanding of Trump's political standing and security measures. However, this does not necessarily mean that this incident will have no impact on the market.
Conclusion
The Ethereum price crash is a result of a confluence of factors, including the FUD wave, Fed rate cut expectations, and the Trump attack incident. While these factors intertwine, the FUD wave appears to be the primary driver of this price plunge.
Investors should approach Ethereum's future development with caution and monitor market sentiment and related events. Until the FUD wave subsides, Ethereum prices are likely to remain volatile.
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