After what has been two weeks of an unimaginable rally for the value of Ethereum, the digital asset appears to be working out of steam. ETH’s worth has now declined as soon as extra beneath $1,600 after a pointy downturn on Tuesday. The perpetrator for this appears to be rising FUD throughout the group.
FUD Could Have Been The Trigger
According to Santiment, the social dominance of Ethereum grew quickly within the final couple of days. While this could typically be a great factor, it tells a unfavorable story this time round. Ethereum is now dominating 21% of cryptocurrency dialogue on social media and the on-chain information aggregator says this is perhaps proof that FUD is perhaps behind the dip. However, this will not be the one motive.
A report from Bitcoinist had beforehand proven that profit-taking in giant belongings resembling Bitcoin and Ethereum had been ramping up with the rise in worth. Santiment additionally highlights this in its submit, pointing to the spike within the profit-taking ratio on January 20. Taking this in live performance with the rising FUD, it presents a recipe for catastrophe for the digital asset.
Another outstanding occasion was the Wormhole attacker began transferring the stolen funds round. On Monday, the attacker moved over $155 million in ETH to OpenOcean which they proceeded to trade for staked ETH tokens resembling stETH and wstETH.
The dumping of those cash on the open market noticed promote strain mount on ETH throughout this time. It contributed to the already declining momentum, ensuing within the present dip within the worth.
Can Ethereum Recover From Here?
Despite the current decline, the general sentiment for Ethereum remains to be skewing largely towards purchase. This is as a result of the cryptocurrency remains to be buying and selling effectively above its 50-day and 100-day transferring averages. And even with the decline, it continues to development round its 200-day transferring common.
What this reveals is that, at the least within the quick to mid-term, there’s nonetheless quite a lot of bullish sentiment surrounding the digital asset. Add within the ample help that has constructed up round $1,500 over the past couple of days and Ethereum remains to be presenting as a formidable alternative of funding.
