The cryptocurrency market took a new dip today as its overall market cap plunged due to a decline in cryptocurrency prices.
Most notably, Ether the native digital token for Ethereum has seen a decline in its price below the $1500 mark.
On Monday, when trading returned, the overall market trend was sluggish. By the end of Monday, the price of ETH was valued at $1460s, the lowest currency has touched for over a month.
The new market price accounts for a 2.0% decline in the world’s second most prestigious cryptocurrency.
Earlier this month the currency touched an all-time high for the year 2023 as it reached to $1,700 mark. Giving currency the 13% raise in its price as compared to its price back on 31st December 2022.
Why Price of Ether (ETH) Declined Today?
The recent dip in the cryptocurrency market is due to the fears that U.S. regulators might push for strong regulations regarding cryptocurrency.
Last weekend the report made the headlines that U.S regulators are thinking of suing Paxos Trust Co.
Paxos Trust Co. is one of the biggest issuers of stablecoins in the country. The trust has been accused of breaking regulations for investors’ protection while offering unregistered stablecoins.
The crypto community globally has condemned this act saying that the trust has no respect towards the investors’ sentiment whatsoever.
Ether (ETH) is the world’s most significant stablecoin this news has negatively impacted ETH and halted its price surge. Crypto investors have backed SEC to sue Paxos Trust Co.
This news came exactly at that time when Kraken was about to reach an agreement with the SEC and agreed to shut down its cryptocurrency staking program.
The situation seems more complex for the Ethereum network. It is important to remind readers that back in September 2022, the Ethereum blockchain transformed itself into a proof-of-stake crypto platform.
Now, U.S. authorities are after staking operations across the U.S this has raised the eyebrows of the top leadership of Ethereum. It is interesting to see how things will unfold for Ethereum moving forward.
The Former Chief Business Development Officer at DAO Seemed Worried
The former business development chief at DAO, Jacob Blish recently said the SEC crackdown can be daunting for the entire DeFi ecosystem.
Lido Finance is the biggest DeFi platform that provides the largest ETH liquefied staking services.
Decentralized protocols offer the users complete control over their equity as there is no regulatory body controlling the platform.
In another development, the head of Coinbase (the biggest crypto exchange in the U.S.) said that in his court hearing against SEC, he will defend crypto-currency staking.
The uncertainty that is currently looming around the future of staking has also made the future of Ether uncertain.
What is The Next Stop for Ether’s Price?
The current price of ETH is $1,470, but its price may move toward 200DMA at $1,440 if the regulatory action against ETH continues to dent the investors’ sentiment.
It also seems that traders might not be interested in investing in ETH because U.S. CPI data is due to be published on Tuesday.
This data will clarify the direction of the U.S. Federal Reserve’s future interest rate policy.
The current market sentiment shows investors will not be interested in taking any risk whatsoever at the moment.
However, the downward trend regarding the fed’s policy rate might give some momentum to the price of ETH. It can also send ETH back on its way to recovery at $1500.
Moreover, if CPI data showed upward momentum regarding future interest rates this would further send ETH price in a downward direction.
As the things stand, ETH might touch all the way down to $1,350. Market experts do believe that investing in Ether is highly risky throughout this week.
Hence, investors need to look for alternative investment opportunities where less risk is involved. Investors need to consider viable alternatives.