- Ethereum (ETH) is facing a steep correction, falling 2.9% in the last 24 hours and nearly 12% over the past month according to CoinGecko data.
- Market-wide pressure from high inflation, rising oil prices, and uncertainty over Federal Reserve interest rate cuts is driving the downturn.
- Prediction markets now indicate a 56% chance that ETH will drop below the $2,000 price level before the end of May.
Ethereum is experiencing a sharp price decline this week as part of a broader cryptocurrency market sell-off. The second-largest digital asset is currently testing a critical support level around $2,100, a threshold it has not breached since late March.
This downturn coincides with disappointing macroeconomic data that has reduced hopes for imminent Federal Reserve interest rate cuts. Consequently, rising bond yields and elevated oil prices are further dampening investor appetite for risk assets like cryptocurrencies.
The Federal Reserve‘s potential policy stance under new Chair Kevin Warsh remains a key uncertainty. Meanwhile, the upcoming vote on the CLARITY Act presents another variable that could sway market sentiment in either direction.
According to a recent prediction market signal, traders are betting there is now a majority chance ETH falls below $2,000 this month. This bearish outlook reflects the prevailing negative momentum across financial markets.
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