Ethereum (ETH) experienced a dramatic plunge, marking its worst trading day in over a year. The cryptocurrency’s value plummeted by more than 22% within a single day, with ETH trading around $2,100 earlier today. This sharp decline has drawn significant attention, including criticism from Bitcoin skeptic Peter Schiff.
In a recent X post, Schiff pointed out Ethereum’s swift decline, mentioning its drop to $2,100 just two days following his prediction. He also highlighted a 15% decrease in Ethereum ETFs, introduced to the market merely two weeks ago, suggesting Ethereum’s impending dip below $2,000. Additionally, Schiff contrasted this with a 2% uptick in gold values and a 10% slump in Bitcoin, asserting gold’s supremacy in the financial arena.
Ethereum (ETH) Volatility Soars Amid Market Turmoil
Amidst the market turmoil, a report from QCP highlighted that aggressive selling by Jump Trading and Paradigm VC played a significant role in the sharp decline of Ethereum. This selling frenzy was exacerbated by market makers scrambling to realign their positions when Ethereum’s front-end volatility spiked from 30% to 120%.
Despite the turmoil, both forward basis and funding rates have managed to hold steady. The situation was likened to a “perfect storm” in the report, attributing the drop in Ethereum and Bitcoin prices to heightened selling pressure and liquidations during the Asian trading session, resulting in new lows of $2,116 and $49,000, respectively.
The increasing instability can be attributed to the general macroeconomic environment as well. The recent unemployment data from the US proved disappointing and resulted in increased volatility across various asset classes. VIX, a measure of market volatility, rose to 50, a level that is usually only reached during major crises such as the global financial crisis in 2008 and the COVID-19 pandemic. Moreover, USDJPY 1-month at-the-money volatility jumped to 16%, suggesting more market instability.
The situation has been worsened by global events. Over the weekend, Israel killed a Hamas leader, which escalated tensions while Iran threatened to hit back, and America sent troops into the Middle East. Thus, this geopolitical unrest has further heightened the risk-off mood prevailing throughout global markets.
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