Ethereum Tanks Alongside Other Top Coins Amid Federal Reserve Plans to Hike Rates

Ethereum Tanks Alongside Other Top Coins Amid Federal Reserve Plans to Hike Rates

The Federal Reserve is planning to hike interest rates in the US, which has sent many investors scrambling back into Bitcoin and other top coins amid fears of a crash. In response, Ethereum crashed down almost 20% since its last Thursday’s high at $1,400 per coin.

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The “ethereum price” is one of the top cryptocurrencies, but it has tanked alongside other top coins amid Federal Reserve plans to hike rates. The “Bitcoin Price” and the “Litecoin Price,” have also taken a hit.

Ethereum Tanks Alongside Other Top Coins Amid Federal Reserve Plans to Hike Rates

The Federal Reserve aims to reduce its balance sheet and raise interest rates, according to minutes from its December FOMC meeting. The confirmation of these intentions, as well as the Fed’s overall hawkish tone, dampened the crypto market before trading ended yesterday.

The price of Ethereum and other popular cryptocurrencies, such as Bitcoin, fell when the stock market fell. According to market statistics, the former has lost 9.83 percent in the previous 24 hours and 6.87 percent in the last seven days. Here’s a glance at what’s going on outside of the market.

Ethereum is not yet ready for adoption, but it is halfway there.

In a two-hour interview with the Bankless podcast, Ethereum co-founder Vitalik Buterin refuted scalability concerns. He outlined a five-point strategy for the cryptocurrency’s success. Ethereum co-founder Vitalik Buterin said that Ethereum has progressed by 50% in the last six years.

Buterin stated that Ethereum needs to become lighter and quicker in blockchain data in order to attain ultimate scalability and decentralization. He said that it would then be possible to implement it on a large basis. The Russian-Canadian programmer came to the conclusion that a successful and thorough implementation of layer 2.0 is required for Ethereum to enable broad adoption.

Buterin reiterated that his ideal scenario for Ethereum does not include sacrificing decentralization for scalability, even if the upgrade is slated to be completed by mid-year. He also reiterated his position that transactions should not cost more than 5 cents, despite the fact that Ethereum’s transaction fee is at least 100 times that amount.

Ethereum’s price is expected to rise to $5,000, according to market experts.

Ethereum hit a new high of $4,867 on November 10th of last year, but has since fallen along with other crypto markets. However, according to a Cointelegraph piece released yesterday, there are multiple on-chain strong evidence that Ethereum will try to hit another record high in the next months, with a price estimate of $5,000 indicated.

According to market observers, the token is ripe for a comeback, since it is presently trading around the trading zone that previously attracted purchasers. Ethereum deposits to exchanges for trading are predicted to drop, causing the price to climb. In addition, Ethereum is expected to break slightly above its falling wedge resistance, and the government is expected to maintain cheap money flowing into the stock market to keep it afloat.

The creator of WeekInEth believes that Ethereum will succeed in dethroning Bitcoin.

According to recent statistics, Ethereum, the second most valued token, has become 140 percent more lucrative than the market leader Bitcoin. Throughout the four quarters, Ethereum beat Bitcoin due to the NFT expansion and a scaled DeFi sector. According to market observers, the crypto currency has already outperformed Bitcoin this year.

Evan Van Ness, the creator of WeekInEth, is a more upbeat analyst who cites Fred Wilson to believe that Ethereum will ultimately overtake Bitcoin for the top slot this year. He predicted that the two markets will converge for a variety of reasons, one of which would be the complete deployment of Ethereum 2.0. The “Merge,” which would reduce Ethereum’s power usage by up to 99 percent, will attract millions of users, causing liquidity to skyrocket and the market value to skyrocket.

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Over the previous two years, the supply of Ethereum has decreased by 47%.

The price of Ethereum has risen in recent months due to growth reasons, according to network behavior analytics company Santiment, while its supply ratio in centralized exchanges has plummeted by a considerable 47 percent.

Over the previous 24 months, the price of Ethereum has risen by more than 2400 percent as holders shifted tokens to cold wallets. However, the move was not limited to Ethereum’s tokens. Bitcoin’s supply has also decreased, with the quantity of coins available for circulation now being 25% lower than it was two years ago.

The performance of the Ethereum (Ether) market

In the last days of 2021, the price of ether battled to break beyond the $3,800 barrier. Despite this, the token had a moderate start to the year, rising to a week high of $3,877 on Tuesday, according to statistics from coinmarketcap. The ETH/USD pair, on the other hand, was rejected over $3,800 and fell to $3,400, before bottoming out at $3,460.

Ethereum Tanks Alongside Other Top Coins Amid Federal Reserve Plans to Hike Rates

Trading chart for Ethereum (ETH).

As the larger cryptocurrency market responded to unfavorable news from the Federal Reserve, the price continued to fall. Ether is now trading at $3,459, having rebounded significantly from a four-week low of $3,432.90 earlier today.

The present picture is gloomy, and if the price falls further, Ethereum will seek immediate support around $3,385. Bears provide a significant stumbling hurdle at $3,800 for the token, but passing this level will likely open the door for a rebound.

Visit our Investing in Ethereum guide to learn more about this coin.

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