Ethereum is one of the biggest cryptocurrencies and comes second only to Bitcoin. However, despite that, people often seem to neglect this cryptocurrency giving more attention to its counterparts. What affects ethereum price and what causes Ethereum prices to drop? This article will show you the answer.
What affects Ethereum price?
ETH’s price boils down to supply and demand.
If the supply of ETH decreases or demand for ETH increases, its price will rise. If the supply of ETH increases or demand for ETH decreases, its price will fall.
Ether’s supply and demand are affected by multiple factors including specific factors particular to Ethereum itself and more general factors ranging from the crypto market to overall global financial market conditions.
What causes Ethereum prices to drop?
ONE WEEK AGO (NOVEMBER 8)$1,569.99
ONE MONTH AGO (OCTOBER 16) $1,275.69
3 MONTHS AGO (AUGUST 17) $1,880.60
(Prices updated: November 17, 2022)
Notwithstanding October’s decline, Ethereum's price remained relatively stable over November. That’s significant because other assets tanked during that time, including stocks and gold. But experts don’t think this means crypto and the stock market are uncoupling, at least not yet.
Crypto’s recent stability could be do in part to the resiliency of long-term holders, but whether that resiliency is here to stay remains to be seen. It’ll be a stacked end of the year; additional volatility to Ethereum's prices could be introduced via inflation reports through the end of the year, Federal Reserve meetings and the midterm elections. Indeed, that’s what experts say has increased volatility up until now: continued surging inflation, shifting U.S. monetary policy, mainstream adoption and the continuing war in Ukraine. Government officials have also continued to show an interest in more crypto regulation and even the possibility of creating a government-issued digital currency.
Hope this article can help you get a better understanding of what affects Ethereum price and what causes Ethereum prices to drop.
