The value of Ethereum has been causing unease among investors due to the growing possibility of a decline in price.
As Ethereum continues to experience fluctuations in value, investors are closely monitoring the situation to determine whether they should hold or sell their investments.
The crypto market has seen some improvements in the past few days as the market anticipates a slowdown in the US Federal Reserve’s hawkish stance on the economy.
With the backdrop of three major US banks that collapsed in the past weeks, investors and traders in crypto doubled down on this bullish thesis.
This doubling down sent major cryptocurrencies skyrocketing, with Bitcoin rallying 25% in the last seven days.
Between Bitcoin and Ethereum, the latter has been performing worse than expected since the former’s rally.
Although the altcoin only presented a 0.3% decrease in price since yesterday, ETH investors are still cautious about the coin’s future price movement.
Ethereum Follows Bitcoin In Movement
The top altcoin’s correlation with Bitcoin is a deciding factor in its price movement. At the time of writing, the two major coins are highly correlated with one another, meaning that if Bitcoin moves upwards ETH would do the same.
Watching BTC’s price movement after the implosion of the three major financial institutions – Silvergate Capital Corp., Silicon Valley Bank and Signature Bank – will give us a clue as to how ETH would move in the next few days.
As of writing, Bitcoin is up nearly 5% in the daily timeframe. If the top altcoin follows this bullish movement, however, Ethereum would face resistance in its technicals.
According to TradingView’s technicals tab, ETH is a strong buy for investors. However, the relative strength indicator of the coin shows that it’s on the path of a correction that might happen in the coming days.
At $1.7K, Should Investors Be Worried?
Ethereum price hitting $1,800 is still a big barrier for the token as this opens the possibility for a big upside for investors. If rejection happens at this price point, ETH might stagnate above its current support at $1,745. Defending the current support would give ETH bulls enough space for an explosive upwards momentum.
However, this is all a bet that the US central bank won’t touch the interest rate to help alleviate the stress on the country’s banking system. If the Fed implements another interest rate hike, we might see the pain in equities and crypto markets.
ETH total market cap at $218 billion on the daily chart at TradingView.com
March 22 is the day the Fed would announce the next move in controlling inflation in the US. Monitoring this should give investors and traders some sort of an edge in the area of decision-making.
Meanwhile, market optimism should be kept in check, however, as economists already expect the Fed to raise the interest to 5%.
-Featured image from American Psychological Association