Understand market volatility: an accent on Ethereum (ETH)

Cryptocurrency has been a class of volatile assets in recent years, the fluctuating prices wildly between the ups and downs. The underlying engines of this volatility are complex and multiple, but a key factor is the feeling of the market. In this article, we will immerse ourselves in the world of volatility in the cryptocurrency market and we will specifically focus on Ethereum (ETH), exploring what motivates its price movements.

What is market volatility?

Market volatility refers to the degree of uncertainty or unpredictability in the value of an asset. It can manifest in various ways, including changes in supply and demand, changes in the feeling of investors and changes in economic indicators. In the context of cryptocurrencies, market volatility can cause extreme price oscillations, which makes essential investors to understand the underlying factors stimulating these fluctuations.

Ethereum (ETH): a cryptocurrency based on the blockchain

Ethereum is an open source blockchain platform that allows the creation of intelligent contracts and decentralized applications (DAPP). It was founded in 2014 by Vitalik Buterin and has since become one of the most popular and most used cryptocurrencies in the world.

Understand the volatility of the Ethereum market: key factors

While the inherent value of Ethereum as a technological platform cannot be directly correlated at its price, several external factors contribute to its market volatility:

• supply and demand: The constant influx of new users, projects and partnerships arouses ETH demand. However, this increased offer can lead to a drop in price if the total supply is not equal by an equivalent increase in adoption.

• Regulatory uncertainty: Governments and regulatory organizations around the world are still struggling with the concept of cryptocurrency regulation. Uncertainty surrounding the legal status of ETH and other cryptocurrencies can have an impact on the feeling of investors and fluctuate prices.

• Global economic conditions: Cryptocurrencies markets are strongly influenced by macroeconomic factors, such as inflation rates, interest rates and GDP growth. A significant change in global economic conditions can lead to a training effect on the prices of cryptocurrencies.

• Technical indicators: Technical indicators, such as mobile averages, RSI (relative force index) and Bollinger strips, are used to assess the feeling of the market and predict price movements. However, these tools can be subject to biases and manipulation, which makes it essential to consider their limits when analyzing market data.

Senture of the market: a key engine of the movements of the Ethereum Price

The feeling of the market is a critical factor to determine the movements of Ethereum prices. Here is some key information on the current market feeling:

• Haussier feeling: A strong support from institutional investors, venture capital companies and major actors has helped to increase the bullish feeling towards the ETH.

• Lowering feeling: The growing concerns concerning regulatory uncertainty, security risks and the impact of the COVVI-19 on the world economy fueled the lowering feeling.

• Neutral feeling: A balanced view between market players, certain investors considering the ETH as a precious asset for its use case in requests for decentralized financing (DEFI).

Movement of historical prices of Ethereum

To better understand the movements of Ethereum prices, take a look at its historical prices:

• 2014: ETH was introduced on the market and experienced rapid growth, from $ 0.25 to $ 1.08 in just two months.

• 2017: The price is soaring at a summit of $ 1,400 in April 2017, to collapse in October 2017 due to a major hack on the Ethereum network.

• 2020: ETH experienced significant growth during the COVVI-19 pandemic, reaching a summit of $ 4,300 in June 2020.

implement implement trading strategy based