- The Federal Reserve’s decision caused a significant drop in Ethereum [ETH] Prices.
- Retail investors showed interest as whales and network growth slowed, leaving ETH’s recovery uncertain.
On June 14, the Federal Reserve decided not to implement its eleventh consecutive rate hike. This was done when assessing the impact of the previous ten increases. The decision was made by the Federal Open Market Committee (FOMC) at their two-day meeting.
However, the commission predicted that two more rate hikes of a quarter of a percentage point are likely before the end of the year.
Read Ethereum’s [ETH] Price forecast 2023-2024
FOMC causes FUD
The FOMC’s decision to halt rate hikes had a direct effect on the price of Ethereum. CoinMarketCapThe data revealed a 6.49% drop in the value of ETH over the past 24 hours.
The decisions made by the FOMC often carry significant market weight due to multiple factors. When the FOMC hints at possible rate hikes, it changes investor sentiment.
Higher interest rates make traditional investments more attractive, reducing the demand for cryptocurrencies. In addition, market sentiment and risk perception play a role. When the FOMC expresses caution or concerns about economic stability, investors tend to become more risk averse, resulting in a sell-off in cryptocurrencies.
In addition, regulatory concerns and potential policies discussed during FOMC announcements could negatively impact crypto markets.
Investor panic was evident in the behavior of the whales. Dates from Glasnode highlighted a significant reduction in addresses by more than 10,000 ETH in recent months.
However, retail investors continued to show interest in ETH, seeing the drop in price as an opportunity to buy the coin at a discounted rate. While retail investor interest may temporarily support the price of ETH, it leaves them vulnerable to whale behavior in the long run, as the majority of ETH was still held by ETH holders.
📈 #Ethereum $ETH Number of addresses with 0.01+ coins just reached an ATH of 24,343,133
Previous ATH of 24,343,031 was observed on June 11, 2023
View statistics:https://t.co/XXb0u19ouH pic.twitter.com/u7rzmRqXcz
— glassnode alerts (@glassnodealerts) June 15, 2023
Some traders remain hopeful
Recent data also suggested a decline in Ethereum network growth in addition to price. This indicated a declining interest from new addresses. In addition, the speed of Ethereum also decreased. This was indicative of the substantial reduction in the number of ETH transactions on the network.
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Source: Sentiment
Despite these factors, data from Coinglass revealed an increase in the number of long positions taken against ETH in recent days. This suggested that investors remained hopeful and optimistic about Ethereum’s future prospects.
Source: mint glass
