Trading | 3 months ago
The cryptocurrency market faced a heavy crash last week due to the uncertainty caused by China's strict ban on usage of crypto. The cryptocurrency bloodbath continued for three days. As a result, Ethereum which is the second largest cryptocurrency in the world in terms of market capitalization, fell by 41.4% in the last week against the US dollar.
Since the start of the year 2021, Ethereum rallied to the all-time high at around $4000 based on the rising institutional adoptions and retail investors. The usage of blockchain technology in multiple industrial sectors including finance and banking sectors also contributed to the rise of Ethereum. However, Ethereum and many other cryptocurrencies has fallen from an all-time high due to the restrictions imposed by China.
Lot of analysts are predicting that the ability of celebrities or social media personalities to influence the price of Bitcoin or Ethereum is the reason Chinese government are taking strict regulatory measures. Cryptocurrencies are just a piece of code, but fundamentally they have no value at all. Several countries including Turkey and India have already announced the ban on use of cryptocurrencies.
The price of Ethereum is not entirely dictated by its usage in blockchain technology, rather it is dictated by some other external factors like fake news and social media speculation. Regulatory body is needed to increase the retail and institutional trust on cryptocurrencies like Bitcoin and Ethereum. This heavy price correction in Ethereum also created an opportunity for new traders to invest in cryptocurrency. One must look for buying opportunities in Ethereum at the current trading price.
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