Continual rise or fall, as in other markets, is not possible in the cryptocurrency market. However, due to a higher number of investors without financial literacy in crypto, people interpret every drop as the apocalypse. Or they treat every significant rise as the last fall being behind us. Both are unrealistic.
Cryptocurrencies Rise and Fall
Yes, cryptocurrencies rise and fall like other markets. However, there is a unique and frequent occurrence in crypto. Some altcoins may not rise after falling. Well-known examples include LUNA and UST. These days, increasing tensions in the Middle East are causing declines in altcoins, leaving investors unenthusiastic.
Just like the crash at the end of 2022, we are experiencing days similar to when everyone said crypto was finished, crypto is useless, etc. Those big crypto maximalists are starting to curse the markets again. And when the markets rise again, they will once again claim to be the biggest maximalists and chant that the future is here. Strange, isn’t it?
Cryptocurrencies rise and fall, as they have for years. If the internet is not going to shut down globally soon, if access to electricity is not going to be limited, and if a third world war does not render phones and other smart devices useless, then we will see all-time high days again. And when that day comes, investors who act bravely at the right level will again make profits. And others will keep waiting for opportunities to buy at those high levels. When they say the opportunity has come, bear markets will greet them with a “Welcome”.
Ethereum (ETH) Hits a Low
Ethereum‘s price in USD has doubled since it switched to proof-of-stake in September 2022. However, when priced in Bitcoin, the picture is much worse because during the same period, we saw a 33% drop in the ETHBTC ratio. Recently, the ETH/BTC ratio continued to decline, losing over 9% last month and falling to 0.048 BTC. This ratio was last at these levels in May 2021.
Still, Andrey Stoychev, the President of Prime Brokerage at Nexo, believes that the price, now at a three-year low, should reverse following news from Hong Kong.
“Bitcoin‘s very significant block rewards are halving in days, just as the balances of Ether on exchanges are at their lowest levels in years. This setup alone could lead to more interest in ETH, especially with the anticipation of bigger news from Hong Kong – namely the approval of local Bitcoin and Ether-based ETFs. In light of this market situation, it can be said that Ether might perform a sharp, distinctive recovery.”
Even at current rates, market participants can buy ETH for both a short-term recovery play and a longer-term trade considering all potential developments. However, the key levels to watch for ETH/USD are currently $3,300 on the upside and $3,000 on the downside.”
And as we always write, even if Andrey Stoychev turns out to be right in the future, he too cannot see the future. Therefore, you should not fully trust anyone’s predictions about the future.
