Ethereum prices moved above $2,000 for the first time since May, mostly from news on its upcoming migration to a proof of stake consensus mechanism.
Several players had projected how the transition could possibly influence Ethereum positively.
The bullish signs include the increase in Ethereum Name Service (ENS) registrations over the last four months. Many consider this to represent a higher demand for Ethereum.
OFAC Tornado Cash sanctions
The recent decline was kickstarted by news of the US OFAC sanction of Tornado Cash, leading to concerns of censorship and centralization.
Some industry players have pointed out that 66% of Ethereum’s beacon chain validators could adhere to these demands.
But Coinbase CEO Brian Armstrong has stated that the firm would shut its staking services if regulators demand that it censor transactions.
However, it is unlikely that this was the sole reason for Ethereum’s value drop in the last seven days, especially after double-digit gains in the weeks before.
Bitcoin, Ethereum, and altcoins shed gains
In the last seven days, the cryptocurrency market cap has taken a beating. For context, Bitcoin lost about 13% of its value in the past week, according to Coingecko data.
Other major cryptocurrencies like Polkadot, Solana, Cardano, Ethereum Classic, Avalanche, and Polygon also shrank by double digits within the same period.
However, there are some signs of recovery in the last 24 hours. The overall crypto market cap is up 0.3%, with trading volume standing at over $76 billion.
But Ethereum is yet to recover fully. It’s currently trading at $1,587, with an almost 2% decline in value in the last 24 hours.