3 - 5 minute read
Ether, the second-largest cryptocurrency by market capitalization, erased all its recent price gains following the seamless implementation of the highly anticipated Shanghai upgrade. On Tuesday, Ether hit $2,118, and later that week, it dropped to as low as $1,833, its lowest price since April 9, 2023. On April 12, the hard fork marked the last major step in the transformation of the Ethereum blockchain from a proof-of-work to a more energy-efficient proof-of-stake protocol, allowing the withdrawals of tokens worth $35 billion locked in staking contracts. ETH then surged to its highest level in 11 months shortly after the event. However, it has since fallen by over 13%, intensifying a wider price slump in the cryptocurrency market.
According to Edward Moya, senior market analyst at foreign exchange market maker Oanda, Crypto markets have been showing weakness in the past few days as concerns around sticky inflation, stock market earnings, and a looming recession have dragged prices lower. These macroeconomic and crypto-industry focused uncertainties have affected the wider digital asset market. The price of Bitcoin was recently trading at $27,200, down more than 3% over the past 24 hours, having tumbled more than 10% from a high comfortably above $30,000 on Tuesday.
Although Ether enthusiasts hoped that the Shanghai upgrade would propel the cryptocurrency to greater heights, the recent slump has caused a change in perspective. While some traders might be discouraged by the cryptocurrency’s poor performance, others might find this an opportunity to invest. With the cryptocurrency market showing increased volatility, there are potentially lucrative opportunities to capitalize on market fluctuations.
Ether’s inability to capitalize on the upgrades with an extended bullish rally resulting in the most prolonged bearish trend since last year is causing a lot of buzz in the cryptocurrency community. People who were bullish on ETH’s level of implementation and had hopes for stronger price gains are finding this trend disappointing. This trend calls for traders to adopt a cautious approach and avoid being swayed by short-term fluctuations. Instead, they need to focus on the crypto-project’s long-term fundamentals and avoid being blinded by FOMO.
The Ethereum network has always been the go-to for most decentralized finance (DeFi) projects. If Ether’s recent slump is prolonged, this could potentially negatively impact the liquidity of most DeFi projects, which might impact the overall crypto market. However, with the solid fundamental network underlying Ether, traders should consider holding on their assets until the market recovers.
The Bottom line
Although recent events signal a bearish trend for Ether, traders and investors shouldn’t lose hope. Instead, they should consider this an opportunity to mitigate risks and optimize their investments. The market volatility might present a perfect opportunity to buy low and sell high, or simply hold on to the Ethereum network’s fundamentals, giving the market time to stabilize. It’s highly recommended that traders observe the market closely, have a long-term approach towards investments and avoid being swayed by short-term market fluctuations.