Ethereum price remained under intense pressure on Wednesday as the crypto industry faced the FTX decline. ETH was trading at $1,216, down from this week’s high of $1,290. The price is up about 13 per cent from this month’s low.
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biggest cryptocurrency news This month has been fruitful for FTX, the world’s second largest exchange. Its collapse was the biggest since 2014 when Mt.Gox went out of business, losing millions.
Ethereum And other cryptocurrencies have seen their prices slide amid rising contagion risks. Historically, most asset prices decline when a major underlying asset declines. For example, banking stocks fell heavily in 2009 following the collapse of Lehman Brothers.
Ethereum price pulled back as demand for the cryptocurrency decreased. The number of people investing in cryptocurrencies has decreased while withdrawals from exchanges have increased.
The same is true with other allied industries. For example, the total value locked in Ethereum’s DeFi network is set to drop from over $150 billion to around $40 billion in 2021. Most lenders and decentralized exchanges have seen significant outflows.
The same is true for the non-fungible token (NFT) industry. Recent data shows a decline in transaction volumes in the industry. Some analysts believe that the NFT bubble is bursting as many investors are struggling to get out.
Nevertheless, there is a silver lining in the crash of FTX. First, due to the magnitude of the collision, there will be new regulations to weed out bad apples in the crypto industry. This is in line with the US response to the collapse of Lehman Brothers.
Second, for Ethereum, it could lead to more demand for decentralized exchanges (DEXs). Analysts believe that DEXs such as Uniswap and dYdX are more secure than their centralized peers.
Ethereum Price Prediction
The chart below shows that ETH price has been in a strong bearish trend over the past few days. Along the way, the coin has formed a bearish pennant pattern which is shown in black. Historically, a bearish pennant pattern has usually been a bearish signal. It has also moved slightly below the 25-day and 50-day moving averages.
Therefore, there is a possibility that there will be a bearish breakout in Ethereum price soon as sellers target the key support at $1,100.
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