The cryptocurrency market has witnessed a significant slump, affecting all digital currencies, including Ethereum. Over the past week, Ethereum’s value has seen an 18% decrease, moving further away from the once anticipated $3,000 price point. The present situation indicates a less promising outlook for the second-largest cryptocurrency by market capitalization.
Short-lived Rally and Subsequent Decline
Ethereum’s recent surge to $4,066 was short-lived as it succumbed to a 7% decrease, trading at $3,244.67. The drop transpired despite a substantial 66% increase in trading volume, amounting to $31 billion. The decline followed the peak on March 13th, contradicting expectations set by the upcoming Ethereum Denison Upgrade, which failed to drive the price to record highs.
Understanding Market Influences
While Ethereum sits 33% below its all-time high, the broader cryptocurrency market mirrors its downturn, with Bitcoin also experiencing a loss in value. Factors contributing to the market’s bearish trend include the Federal Reserve’s meetings, which discuss crucial economic policies and interest rates, and the market dip in India.
Regulatory Effects on Ethereum’s Outlook
Before the Federal Reserve’s economic discussions, noticeable dips in crypto prices have been a common pattern. With eight such gatherings annually, the market remains sensitive to their outcomes. Moreover, the Securities and Exchange Commission (SEC) has yet to approve an Ethereum Spot ETF, with speculative odds falling from a hopeful 75% in January to a mere 28% in March.
The SEC’s stance on Ethereum, which remains unclear as a security or commodity, contrasts with its decision on the Bitcoin Spot ETF, seen as a protective measure for investors. Political influences on the SEC, highlighted by the actions of Senators Jack Reed and Laphonza Butler, have also played a role in restricting approvals for further spot ETFs.