After what has been two weeks of an unbelievable rally for the worth of Ethereum, the digital asset appears to be operating out of steam. ETH’s value has now declined as soon as extra beneath $1,600 after a pointy downturn on Tuesday. The offender for this appears to be rising FUD throughout the neighborhood.
FUD Could Have Been The Trigger
According to Santiment, the social dominance of Ethereum grew quickly within the final couple of days. While this will typically be an excellent factor, it tells a damaging story this time round. Ethereum is now dominating 21% of cryptocurrency dialogue on social media and the on-chain information aggregator says this may be proof that FUD may be behind the dip. However, this will not be the one motive.
A report from Bitcoinist had beforehand proven that profit-taking in massive property equivalent to Bitcoin and Ethereum had been ramping up with the rise in value. Santiment additionally highlights this in its publish, pointing to the spike within the profit-taking ratio on January 20. Taking this in live performance with the rising FUD, it presents a recipe for catastrophe for the digital asset.
ETH social dominance signifies FUD | Source: Santiment
Another outstanding occasion was the Wormhole attacker began transferring the stolen funds round. On Monday, the attacker moved over $155 million in ETH to OpenOcean which they proceeded to change for staked ETH tokens equivalent to stETH and wstETH.
The dumping of those cash on the open market noticed promote strain mount on ETH throughout this time. It contributed to the already declining momentum, ensuing within the present dip within the value.
Can Ethereum Recover From Here?
Despite the latest decline, the general sentiment for Ethereum continues to be skewing largely towards purchase. This is as a result of the cryptocurrency continues to be buying and selling nicely above its 50-day and 100-day transferring averages. And even with the decline, it continues to pattern round its 200-day transferring common.
What this reveals is that, no less than within the quick to mid-term, there’s nonetheless loads of bullish sentiment surrounding the digital asset. Add within the ample help that has constructed up round $1,500 over the past couple of days and Ethereum continues to be presenting as a formidable alternative of funding.
ETH value falls beneath $1,600 | Source: ETHUSD on TradingView.com
Investors are additionally seeing good income throughout this time with 57% of all holders in revenue. Figures like these additionally assist to push a bullish narrative for the digital asset as extra traders attempt to make the most of the dip and transfer into the inexperienced. Overall, so long as ETH maintains its momentum and buying and selling quantity continues rising, it’ll retest the $1,600 resistance as soon as extra.
ETH’s value is altering fingers at $1,555 on the time of this writing. Its value is down 5.27% within the final 24 hours however buying and selling quantity is up 11.91% over the identical time interval to be sitting at $9.32 billion.
