Ethereum's collapse by 6.45%.. How did the U.S. strikes on Iran affect the cryptocurrency market?$ETH
The Ethereum (ETH) currency has experienced a sharp decline of 6.45% in the past hours, amid a wave of anxiety rising in financial markets. Analysts attribute this collapse to geopolitical tensions arising from U.S. strikes on Iran. What is the connection between these events and the cryptocurrency market? What are the reasons that led Ethereum to this sudden drop? Let's review the details.
Geopolitical tensions shake global markets
The recent U.S. military strikes on sites in Iran have led to instability in the region, increasing investor concerns about the global economic and political future. These tensions usually drive investors away from high-risk assets, including cryptocurrencies known for their sharp volatility.
Ethereum in the eye of the storm
As the second-largest cryptocurrency after Bitcoin, Ethereum is significantly affected by any wave of selling or downturn in the overall market. With a decline in global risk appetite, investors have begun pulling their funds from cryptocurrency investment funds, causing the price to drop by 6.45%, reaching a level of $2,266.
The fundamental reasons behind the decline
1. Large liquidity outflow from ETF funds
Ethereum investment funds have seen massive withdrawals totaling $11.3 million in just one day, especially from large funds like those managed by BlackRock.
2. Ethereum's correlation with Bitcoin
A drop in Bitcoin drives other cryptocurrencies down, and Ethereum is no exception.
3. U.S. regulatory ambiguity
The United States remains ambiguous about the classification of Ethereum, increasing regulatory concerns among institutional investors.
4. Slowdown in activity on the Ethereum network for creating paid applications
The decrease in the number of transactions and project activity reduces the intrinsic value of the currency.
What lies ahead for Ethereum in the near future?
Ethereum faces important support levels at $2,240 and $2,200, and if these levels are broken, we may see a further decline to $2,000. However, if the price can rebound and break resistance at $2,445, it may begin to recover some of its losses, heading towards $2,600 or more.
How are investors dealing with these situations?
Speculators: It is advised to wait for confirmation of a resistance breakout before entering buy trades.
Medium-term investors: They may consider gradual buying near support levels with a clear stop-loss set.
Everyone: Closely monitor geopolitical and regulatory news as they directly impact market movements.
Conclusion
The U.S. strikes on Iran have not only affected traditional markets but have also extended to the world of cryptocurrencies, leading to a notable drop in the price of Ethereum by 6.45%. In these turbulent conditions, the wisdom in investment and careful monitoring of market events remains the best way to preserve capital.$ETH