After falling below $1,000 over the weekend due to growing economic fears, a weak stock market, and rising inflation, Ethereum saw a price rise on Monday. As of Monday morning, Ethereum was trading near $1,100.
Due to a broader market retreat from risky assets, the price of Ethereum, like Bitcoin, has been extraordinarily volatile in recent weeks.
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After a significant inflation report missed expectations and the Federal Reserve raised interest rates by 0.75%, stock markets plummeted substantially, and crypto markets followed suit.
The Ethereum price drop is part of a larger crypto dip, with the cryptocurrency market as a whole shedding more than $1 trillion in just a few months. The values of major tokens have plummeted, including Bitcoin, which has lost 70% of its value since November 2021.
Ethereum’s Aggressive Drop might Retrace
The Ethereum price hasn’t been able to maintain its strong bullish momentum in recent days, as the daily chart shows. Nonetheless, the good news is that the coin is most likely to start moving upwards.
So far in 2022, Ethereum has underperformed bitcoin, which experts believe is due to growing expectations for the network’s switch from proof-of-work to proof-of-stake.
Ethereum just completed a test merge on its Ropsten network, which is a necessary stage in the company’s big software upgrade, which will be finished later this summer.
Its upgrade, dubbed “the Merge” by investors and engineers, would modify how Ethereum transactions are ordered, making it more efficient and sustainable for mass use. The move would definitely influence the token’s price in the longer term.
Ethereum Merge posing new possibilities for the coin
In the short term, Ethereum’s prices are fluctuating due to several unfavourable factors downplaying market sentiment. According to experts, the crypto market is reflecting increased volatility caused by war, rising inflation, and altering US monetary policy.
Other variables, such as the crypto market following the stock market, increasingly widespread usage, and recent price slumps, are also contributing to the current state of crypto pricing, according to experts.
More crypto legislation, as well as the idea of developing government-issued digital money, has piqued the curiosity of government officials. Bitcoin’s price has been on a similar downward trend recently.
Will Ethereum Rise?
Despite the poor start to 2022, many experts remain optimistic, anticipating that the price of Ethereum might reach and beyond $12,000 this year.
In May 2021, ETH shattered all prior highs, reaching a peak of $4,000 for the first time. This was the first time in Ethereum’s existence that it surpassed the $3,000 level. Several cryptocurrency specialists projected that Ethereum would continue to rise as of May 3rd when the price was still around $3,110. That’s what it did until it hit the $4,000 threshold.
When it surpassed $4,850 on November 10, Ethereum hit a new all-time high, which it maintained into December before reversing at the end of the month. Despite the late drop, Ethereum finished the year far ahead of where it started: in January 2021, the price of Ethereum was just over $1,000.
Experts believe that as the market improves, Ethereum’s price will rise again, and might even reach a new all-time high post the dip.
Is This the Right Time to Buy the Dip?
Ethereum is the most well-known altcoin, and for many investors and fans, it’s much more than just another cryptocurrency. Experts predict that by 2022, Ethereum price will rise in value by 400%.
Since its inception in 2015 by computer programmer Vitalik Buterin, ether’s price has risen steadily from $0.311 in 2015 to about $4,800 late last year, with plenty of turbulence along the way.
Even though ether maintained a constant near $1,100 on Monday, it still provides a 700,000% lifetime return on investment (ROI) at the time of writing.
Unlike Bitcoin and other cryptocurrencies, Ethereum has the ability to be used as a software network, allowing developers to create and power new tools, apps, and NFTs. This is what makes it a great investment, and the current price makes this the right time for a purchase.
And yet, experts advise ignoring the ups and downs as with any long-term investment. The recent high price does not indicate that Ethereum’s volatility has subsided.
Cryptocurrency should never account for more than 5% of your overall portfolio, according to experts. Never invest if it means you won’t be able to accomplish other financial goals, such as paying off high-interest debt or putting money down for retirement.
Your capital is at risk.
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