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How Does the Ethereum Decline Affect Traders


The price of Ethereum has been increasing over the past week as the general market sentiment has improved. The second crypto from the main market can extend its value if the macro situation continues to support the session. As of this writing, Ethereum price is trading at $1,333 with a sideways movement in the last 24 hours.

Over the past week, the cryptocurrency recorded a gain of 10% and became one of the best performers in the top 10 from the main market. The price of Ethereum follows market sentiment
According to a report from the Blofin research firm, market sentiment has increased on the back of several reports of an economic downturn.

These expectations of worse financial data could force the US Federal Reserve (Fed) to ease monetary policy. Financial institutions raised interest rates to have the highest inflation recorded in decades. As a result, the global market is suffering. If conditions worsen, the market expects the Fed to back off, allowing Ethereum and other riskier assets to rally.

Today, the Fed will provide more clarity on its next steps; if it decreases, Ethereum price will continue on its bullish path. The positive outlook extends to other cryptocurrencies.

According to Blofin, there has been good progress in the future in the field of choice. The company reported a change in outlook for the first quarter of 2023 compared to the fourth quarter of 2022.

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Crypto Market To See More Changes

The decline in the US Dollar supports the great progress of the price of Ethereum. As measured by the DXY Index (DXY), the currency is once again testing critical support allowing ETH and other risky assets to appreciate. However, the decline of DXY indicates an increase in crypto market volatility. According to Blofin:

It should be noted that the volatility of BTC options in the first month has increased slightly. As the December CPI data is released, the game between investors and financial and commodity markets may increase volatility.

Volatility measures future price movements. The research firm believes that the short-term metrics are negative, but those running on the long-term still show a “relatively bearish attitude.”
Option buyers collect calls (long positions) for BTC with an expiration date set for January 27. The exercise price of these contracts is $18,000 and $19,000. In other words, crypto traders are betting on BTC (and therefore the price of Ethereum) to be higher than today’s level at the end of the month.

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