The crypto market has experienced a steep decline over the past 24 hours. However, the price of Ethereum has fallen more severely than Bitcoin. Ethereum has fallen almost 8% in the last 24 hours and is trading at $1.33K. Worryingly, this fall is not seen yet and ETH is likely to continue to fall.
According to Kevin Svenson, a leading crypto analyst, Ethereum has failed to defend critical support. If ETH continues to fall, it could fall to $1K.
Ethereum has recently successfully completed a merger event, but unfortunately it was not able to be a catalyst. Experts believe that the achievement of such a large-scale software upgrade is extraordinary. However, the price of ETH has dropped after the merger. Many experts stated that the merger could be an opportunity to 'buy on rumours, sell on news'. Since the achievement of the merger is long-term, it received less response.
Experts also emphasized that the merger was completed in unfavorable macroeconomic conditions. The Consumer Price Index for August showed worse-than-expected inflation. The Fed, so far, has consistently taken a 'hawkish' attitude. The market is pricing in a possible 100 basis point interest rate hike. However, the Fed is likely to continue with an expected hike of 75 basis points.
Elon Musk, CEO of Tesla, believes that another big hike from the Fed will lead to deflation. Cathie Woods of Ark Investments also has a similar impression. Meanwhile, the World Bank believes that the market will face a recession next year. They believe that the recession is a consequence of the aggressive monetary policy of major economies.
FedEx also warned of a recession as the slowdown in demand accelerated.
The price of Ethereum and other cryptocurrencies will depend on the next interest rate hike on September 22. If the FOMC moves forward with another 75 basis point hike, it is likely that the move will have an insignificant effect on prices. However, if the Fed continues its hawkish 100 basis point hike, it will likely lead to a strong correction.
