Ether and other altcoins like Cardano, Solana, and Avalanche are down on Thursday after a rough few weeks. The overall cryptocurrency market is down 4% in 24 hours, according to CoinGecko, furthering bearish sentiment.
This comes after the Terra ecosystem completely collapsed, destroying its so-called stablecoin TerraUSD (UST) and sister cryptocurrency Luna, in addition to longer-standing macroeconomic factors that had already added downward pressure to the cryptocurrency market.
“Now that the dust has started settling on the stablecoin saga, the crypto markets have returned to the macro narrative that has been driving it all year. Yesterday’s Fed[eral Reserve] minutes release wasn’t enough to startle investors, but certainly had enough of a surprise to keep them somewhat on edge,” Michael Safai, managing partner at crypto trading firm Dexterity Capital, told Fortune in an email.
Falling to $1,765, Ether was down as much as 11% on Thursday. It’s currently trading at around $1,821, keeping below $2,000.
As the Ethereum readies for its highly anticipated “merge” upgrade, its network has had a few hiccups. The merge plans to shift Ethereum from a proof-of-work network to proof-of-stake, making the blockchain more energy-efficient. On Wednesday, Ethereum’s crucial Beacon chain, or proof-of-stake chain, experienced a “reorg” issue, which could present a potential security risk for the network.
“Client teams have been scrambling to understand the situation so they can figure out what to fix for the last couple of hours!” Ethereum cofounder Vitalik Buterin tweeted.
This could’ve added to Ether’s price rout.
Other altcoins, like Cardano, Solana, Polkadot, and Avalanche, are suffering as well, down 7% to 12% in the last 24 hours.
Bitcoin, the largest cryptocurrency by market value, is also struggling to hold $30,000, currently trading just below at around $29,360. It dipped to a low today of $28,412 before ticking up a bit.
Analysts predict the cryptocurrency market will remain in a similar state until “macro sentiment” is more positive.
“[W]e don’t have that macro support to give this sentiment a boost” yet, Safai said. “So, while individual tokens may have their day in the limelight, especially if things stay quiet this summer, we can expect this rangebound activity and absence of forward momentum to continue for some time.”
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