Ethereum Faces 6% Price Drop Amid Underperforming Hong Kong ETFs, Expected Federal Reserve Policy
Summary:
On April 30, Ether's (ETH) price dropped roughly 6% mirroring similar trends across the crypto market. The decline, to its lowest level in over a week, is largely credited to the disappointing performance of newly launched crypto-linked spot exchange-traded funds (ETFs) in Hong Kong and an anticipated tight-money policy from the Federal Reserve. Despite the dip, Ether's current trends point towards a possible strong upward movement, with a potential to see a price increase of up to 75% by June, if the prevailing bull flag pattern plays out as expected.
Ether's (ETH) price witnessed a downward trend on the 30th of April, dipping nearly 6% to ballpark figures of $3,024, which is the lowest in over a week. This fall mimicked trends seen across the entire cryptocurrency market, which saw an overall reduction of around 4% in its net capitalization. Factors significantly influencing Ether's downswing were the somewhat cool reception to the recently introduced crypto-linked spot exchange-traded funds (ETFs) in Hong Kong and the probable tight-money policy from the Federal Reserve.
Hong Kong's launch day of six crypto ETFs experienced a distinct underperformance, attracting a collective trade capacity of a mere $11 million against the expected $100 million. Bitcoin ETFs amassed $8.5 million of this total, while the rest was attributed to Ether ETFs. This outcome is a stark deviation from the US-based spot BTC ETFs' trading volume of $655 million on their premiere day, January 11. Since the introduction, these ETFs have amassed close to $12 billion, despite the recent slowing of inflows. This stagnation has hindered Bitcoin's bullish journey and negatively impacted Ether in the process.
The falling price of Ether comes in the wake of a looming Federal Open Market Committee meeting on May 1, where it is widely expected that the Federal Reserve will maintain its tight monetary policy. Following data from the CME, projections for cuts in interest rates are now delayed to sometime late in 2024, predicting a maximum of two cuts by the year's end. This shift is primarily due to stubborn inflation and a sluggish American economy.
Cryptocurrency markets have often slid downhill prior to recent FOMC meetings due to investor anxiety. For instance, over 10% and 5% reductions in market evaluations have been recorded in anticipation of the March and January FOMC meetings respectively, causing a drop in leading cryptocurrencies such as Ether and Bitcoin.
Any price decline seen in Ether currently is believed to be part of a bearish trend within what is seemingly a bull flag pattern. This pattern forms during an uptrend where post-strong upward shift price consolidates creating a downward parallel channel due to lower highs and lower lows.
As of April 30, ETH's price seems to be retracting after hitting the upper bull flag trendline earlier in the week. It is presumed that there might be possible drops towards the lower trendline around $2,760 by May. However, the bull flag is completed when the price breaches the upper trendline, paving the way for a revival of the initial rally. If the pattern follows through, ETH's price could soar up to $5,250, a rise of about 75% from today's value, by June.
This report does not provide investment guidance or suggestions. Investments and trading moves inherently involve risks, and it's suggested that investors do their independent research before making a decision.
Published At
4/30/2024 4:17:38 PM
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