The cryptocurrency market faced a bearish hit as Bitcoin and Ethereum prices plummeted in the last 24 hours. Ethereum fell by almost 10%, dropping from its key support level of $1,400 to $1,396.30, marking a two-month low last seen on January 10th.
Similarly, Bitcoin also suffered a significant loss of 7.70% in the last 24 hours, falling to $19,935.07 and hitting its January low. This slump in prices caused the overall cryptocurrency market to experience a bloodbath, with a 6.96% loss in the last 24 hours.
Despite Ethereum’s strong performance at the start of the year, the recent bearish trend has put a damper on the bulls’ momentum. The bears have taken the catch and are stretching the price down, and it appears they are on their way to continuing their downward trend. However, the 24-hour trading volume has seen a rise of almost 100%, indicating some level of support for Ethereum’s price.
Yesterday, Ethereum formed a high near $1,545 before starting a major decline similar to Bitcoin. The price declined over 8%, and the bears were able to push it below the $1,450 support level, closing the day at $1,438.66.
Currently, the price is facing resistance near the $1,420 zone, and a close above the $1,450 resistance level could potentially start a steady increase, bringing the price toward the $1,500 resistance level.
But if Ethereum fails to clear the $1,450 resistance, it could continue to move downwards, with initial support at the $1,410 level, followed by a decline towards $1,350 or lower.
Factors Behind Ethereum Price Down Turn Ride
Several factors have led to the decline in the price of Ethereum; among these is the trouble faced by Silvergate Bank. Another setback for the digital currency is the recent lawsuit filed against the crypto-exchange KuCoin by New York Attorney General Letitia James.
The lawsuit alleges that KuCoin violated the law by selling unregistered securities, including ether. While state and federal regulators, including CFTC, have treated Ethereum as a commodity, the NYAG’s classification of it as a security could have significant implications for the crypto market.
This move could fundamentally change the way ETH and other cryptocurrencies are traded in the US. Investors who have been trading ETH may be concerned about the NYAG’s lawsuit and the possibility that ether may be considered a security. Well, the lawsuit highlights the need for greater clarity in the regulatory framework governing cryptocurrencies.
Related Reading | Bitcoin Slides Below $20K Amidst Growing Crowd’s Interest
