On Wednesday, the price of Ethereum continued to fall as its link with the Dow Jones and Nasdaq 100 indices increased. The coin fell to a low of $1,964, which was its lowest point this week. Other cryptocurrency prices tumbled when it came to a sea of red.

Ethereum’s market capitalization is now at $225.4 billion, which is about 11.4% of the total value of all cryptocurrencies.

The Ethereum price has been on a downtrend since it reached an all-time high of $2,151 on May 12. Since then, it has lost 8.3% of its value.

Don’t go against the Fed.

ETH prices drop sharply as volatility in the market persists. The closely-monitored CBOE volatility index rose by more than 5%.

Ethereum prices were down sharply on Thursday as the cryptocurrency market continued to reel from the recent sell-off. Ethereum, the second-largest cryptocurrency by market capitalization, fell 8.3% to $1,964, its lowest point this week.

There were several reasons behind the volatility. Investors were responding to Jerome Powell’s comments on Wednesday at an event organized by Wall Street Journal.

When he states that inflation was the most pressing issue for the economy. He then states that if needed, the Fed would do whatever it took to get inflation to 2 percent.

Investors, on the other hand, anticipate that this implies. The bank will not come to its rescue as it did in 2018 and during the Covid pandemic.

As a result, it will continue to raise interest rates by 0.50% each meeting. It will also begin a quantitative tightening period. As a result, Ethereum’s price is tumbling because investors do want to clash with Fed.

This sent shockwaves through the markets as investors fear that the Fed would be forced to tighten monetary policy sooner than expected. Ethereum prices, which have been on a tear in recent months, were particularly susceptible to this news.

The second catalyst for Ethereum’s sell-off was a report from Goldman Sachs. Which says that the Ethereum network was facing some scalability issues.

Ethereum co-founder Vitalik Buterin has been working on a solution to this problem, but it is still in the early stages of development.

Investors are worried that Ethereum will not be able to scale as more and more applications are built on top of it.

US stocks connection

ETH prices are falling as well, owing to their strong link with American equities. The Dow Jones drops more than 1,100 points during the session, while the Nasdaq 100 index fell by more than 560 points.

Ethereum followed suit and plunges by over 15%. The Ethereum sell-off was exacerbated by a report from Goldman Sachs which said that the Ethereum network was facing some scalability issues.

The downturn was caused, at least in part, by the slow sales growth in the retail industry. Following disappointing quarterly results, both Target and Walmart suffered significant losses in their stock prices.

Ethereum is also facing some headwinds from a regulatory perspective. The US Securities and Exchange Commission (SEC) is scrutinizing Ethereum and other digital assets more closely. This has led to a lot of selling pressure in the Ethereum market.

Their research shows that the biggest American companies are feeling wage pressure in their operations. As a result, the trend is likely to continue in other sectors of the economy.

There has been a strong link between US equities and cryptocurrencies like Ethereum in recent months.

Once the regulatory environment around digital assets becomes more clear, Ethereum could see a resurgence in price. For now, Ethereum investors should be prepared for more downside in the near term.

James Atkins

I have been writing copy for blockchain-related projects since 2017. I understand the importance of being able to communicate clearly and effectively with both technical and non-technical audiences. By leveraging my understanding of the crypto industry trends, I can help increase adoption in this rapidly evolving landscape.