MARKET CRASH CAUSE WORRY FOR ETHEREUM TRADERS
When the prices of stock started falling a few weeks ago, many were optimistic that the decline was temporal. Only a few days, they’d hoped. But the recent reds have left traders and investors worried. The price fluctuations have neither helped to know chainlink price prediction in 2025, nor helped traders stop seeing reds on their balances. The last few weeks have been messy for Eth traders, and the worst is yet to come.
While optimism still exists about the crypto market, the available data doesn’t allow for such optimism. From the former support price now acting as resistance, to technical analysis predicting more gloom for holders, and more short selling for future traders, the future doesn’t look anything like what we’d hoped for.
WHY HAS THE MARKET BEEN ON A SLIDE FOR WEEKS?
The recent bearish market in cryptocurrency is not without reason, even though the market is hoping for a change. When markets go on bearish runs, as we’re experiencing right now, it’s because of bad market attitudes in other financial markets staying too long, and thus permeating into the crypto market. Yes, there are other market-specific factors that affect market trends, but more often than not (this is the reality of today’s bearish market), it is a culmination of factors.
Although the cryptocurrency market is volatile, whether or not Ethereum blockchain explorer becomes a reality, the attitude from other financial markets affect how people perceive the cryptocurrency market. So, although many still aren’t in support of block chain technology and cryptocurrency, the psychology behind financial markets still applies to cryptocurrency.
THE GENERAL ATTITUDE IN THE MARKET IS AFFECTING ETH PRICE
The growing decline in the prices of most cryptocurrencies has been worrying for traders, and investors. The recent LUNA debacle, and the statements from top crypto thought leaders has left many a crypto investor second-guessing their cryptocurrency investment decisions. Should they invest in crypto for the long term or should they invest in something else.
CRYPTOCURRENCY MIGHT NOT BE THE CURRENCY HEDGE AGAINST INFLATION AS MANY HOPED
For a long time, bitcoin was touted as a store of value, one to use a hedge against inflation, but the current reality makes such hopes false.
Many are beginning to realise that bitcoin might not be a safe haven against inflation as many had hoped. The idea is that since bitcoin is the first and most valuable cryptocurrency, its price will continue to increase. However, if the price doesn’t increase, the relative stability of bitcoin’s price makes it a good store of value.
And so far, – until the recent crash that has refused to correct – the sentiment was true.
But the crash, and subsequent price decline, shows that the stock market and the cryptocurrency market aren’t so far off after all. The reality on ground is revealing that with tighter monetary policies, high inflation, and legislative laws that demotivates investors and spenders, the cryptocurrency market follows the trend of the ‘traditional’ financial market.
NO STABILITY IN PRICES OF STABLE COINS
The myth that stablecoins are a reflection of fiat currency, in terms of price stability, has been debunked. The dwindling price of USDT, and the crash of TerraUSD proves that stablecoins aren’t so stable. Now, while Terra Luna’s system was faulty, the earthquake in the cryptocurrency market is revealing the instability of the market. Therefore, traders and investors are advised against throwing in so much money into the cryptocurrency market.
But will you blame them?
TRADERS STUNNED WITH THE UNCERTAINTY IN THE CRYPTO MARKET
The Terra Luna incident caused investors and traders to lose about $1.7 billion in one day, the most losses recorded ever in the crypto market. What that incident did, and is still doing, is demotivate investors and traders to bet on prices going up. And so far they’ve been right. From Ethereum to Bitcoin, Dogecoin to ShibaInu, prices are slumping, and sloping fast.
The recent crash in the cryptocurrency market, with Ethereum support levels no longer holding, some investors are of the opinion that regulations in the cryptocurrency market will help to manage the volatility and illegal use of cryptocurrency.
The call for regulations in cryptocurrency has been on for a while. From bitcoin ETFs being approved, to countries banning cryptocurrency outrightly, cryptocurrency has won and lost battles for and against regulations. However, the cryptocurrency market is growing, and more and more looking like traditional markets; it is only normal that regulations are put in place to help curb frauds in the space.
ETH SUPPORT LEVELS GOING BELOW $2000
Traders are aware of the drop in the price of Ethereum, and many have predicted that its price will fall below $1,650. The support level of $2000 has sustained for a while with many traders hoping that Eth will close, for the month of May, at $2500.
However, the market trends, according to available data as at the time of this writing, shows that the resistance will only become lower as support level drops too.
A twitter user predicted that Ethereum will fall below $1,650 in the coming days, a move that will help in correcting the market, and return Ethereum to a more stable price. Whether this stability will be above or around $2000 is unknown, but the hope exists.
However, one prediction is almost certain of coming to fruition: the bearish market will continue for a while.
This prediction is based on Head and Shoulder analysis of Ethereum price.
This is a classical pattern that appears at the end of a trend, indicating that the current trend will end soon. This gives traders an idea where the market is headed.
The pattern forms three tops, which are the heads, and two shoulders, and a ‘neckline’ that serves as support level.
Ideally, the head and shoulder trend comes after there’s been a bullish trend in the market.
At the end of the head and shoulder pattern, there’s often a correction, somewhat. The analysis from CryptoCharts shows that the pattern was coming to an end, hence a reason for traders to be hopeful. However, as at the time of this writing, the price of Ethereum was below $2000, but wasn’t as low as $1650. It was selling for $1834.