Ether Slides Down 13% to $1,840, Nears Monthly Low
By the afternoon of April 21st, Ethereum’s price stood near $1,840 for the first time since April 8th. The world’s second-largest cryptocurrency suffered a notable decline since Monday dropping more than 13% in five days, and around 5% on Friday alone. Bitcoin and multiple major cryptocurrency-related stocks performed in a similar fashion in the second half of this week.
ETH Down 13% since Monday, 5% on Friday Alone
After reaching a multi-month high of more than $2,100 on Tuesday, Ethereum went into a steep decline for the rest of the week. Over the course of the week, the world’s second-largest cryptocurrency fell by more than 13%. By Friday afternoon, ETH stood near $1,840.
This week’s decline brought the cryptocurrency near its lows from early in the month and to the lowest price seen since April 8th. It also erased the gains of the rally that accompanied Ethereum’s much-anticipated “Shapella” upgrade which was successfully completed on April 12th rapidly bringing the price above $2,000.
The upgrade itself represented the latest important development in the cryptocurrency’s transition to the proof-of-stake model. The fact that it enabled unstaking caused significant fears that it would cause a downturn though that fear seemingly never materialized as the bulk of requests originated with Kraken—the exchange that was recently forced by the SEC to terminate its staking service entirely.
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Bitcoin, Major Crypto Stocks Experience Similar Performance
While it is currently hard to pinpoint the exact reason for the downturn, the decrease in prices is visible across the entire digital assets industry. Bitcoin, the world’s largest cryptocurrency, has been behaving very similarly to ETH and has declined a little over 10% over the course of the week barely hanging above $27,000 by Friday afternoon.
The downturn comes after a significant rally that started already in January and saw a relatively brief period of stagnation in February. The rally saw Bitcoin rise from around 16.000 on New Year’s Day to above $30,000 before this week’s decline started. Similarly, major cryptocurrency-related stocks performed very well in 2023 and entered into a steep decline several days ago.
Coinbase, for example, is 75% YTD, but 12% in the red in the previous five days. While the industry has been under significant pressure for some time with SEC’s Chair Gary Gensler recently ramping up his rhetoric by stating that most cryptocurrency firms are not compliant, this week had its fair share of disturbing news.
Earlier this week, the report that the inflation in the UK is still above 10% caused widespread concern across the markets and offers one possible explanation for the downward movement. Additionally, on Tuesday, Gary Gensler testified before Congress and further sparked fears about the future of digital assets in the US with his hawkish yet vague responses to cryptocurrency-related questions.
Editorial note (April 24th, 11:25 AM EST): The headline was updated for clarity.
How long will the current downturn last? Tell us what you think in the comments below.