Further pain was inflicted on the markets as major cryptocurrencies Bitcoin and Ethereum slipped on macroeconomic pressures and other factors. As of time of writing, the top altcoin Ether has lost nearly 7% in the weekly timeframe.
This is reflected in the other altcoins as most, if not all, move alongside ETH. However, if the crypto slides further downwards, will it deal a heavy blow on the broader market as well?
The FTX Shockwave Still Felt
Since the collapse of crypto exchange FTX, Ethereum has been in the red, but then that seems normal as other cryptos are, as well.
The decline in ETH’s value, however, began after it reached a record high of $4,635 in December of last year. Since then, the crypto has had massive highs and lows, but mostly the latter.
With Ethereum network fees plummeting to $2.9 million per day from $12.8 million on June 13, the price of ether plunged. The total value locked (TVL) in Ethereum-based smart contracts were also down by 4.5% in the last 24 hours.
Other Factors At Play For ETH
More suffering has been inflicted on ETH as a result of recent occurrences. For instance, the U.S. Federal Reserve raising interest rates last week took a toll on its price, allowing the bears to continue testing the present support price range of $1,164.
Further market pain is to be predicted if the coin breaks its current support. The bulk of altcoins on the top 10 list of Coingecko are heavily correlated to ETH, so this is significant for the altcoin market.
Thus, if ETH declines, other cryptocurrency holders may interpret this as a sign of market weakness, resulting in greater market misery. ETH is trading at $1,184, down 0.2% in the last 24 hours.
Today, prominent indices such as the S&P 500 and Dow Jones have declined by a couple of percentage points as a result of the fear of an economic recession, which impacts sentiment around the crypto.
Ethereum may have difficulty retaining investors if further rate hikes occur at the beginning of the first quarter of next year.
Despite the fact that the altcoin is down 7% in the last seven days, we expect to see a slight bullish pullback so that we may once again test the $1,222 level as resistance.
Currently, the prior price fluctuations of the token indicate that a recovery is forming. However, this is counterbalanced by negative macroeconomic causes and a very pessimistic market mentality, which is a continuation of the bear market that preceded the current events.
Investors and traders should be cautious as the current market volatility might invalidate long positions in the short-term. If ETH continues to backpedal, there will be no doubt that there will be pain for altcoins.
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