Ethereum price is currently trading down 4% at $1,637. There was a slight correction in ETH price after falling to a low of $1,524 on August 20th. While the bulls are currently facing a hurdle at $1,720, here are three factors that could push the price of ETH lower in the near term.
Three factors affecting ETH price
increasing supply on exchanges
After the Ethereum price drop last week, Santiment said that there was a huge increase in the supply of ETH on exchanges just before the price drop. It was noted that this spike was due to Binance moving ETH from an unlabeled wallet to an existing labeled wallet.
As reported by U.Today, massive crypto fund transfers involving Binance wallets were observed. A large transfer of 2.37 billion USDT between the two Binance cold wallets and another large transfer of 1.49 million ETH went to the Binance 8 wallet.
If the supply continues to increase on exchanges, it could mean that holders are taking their coins off the market.
Concerns about merger
Experts are issuing warnings about the potential for replay attacks to occur after the merge update, scheduled for September. During the 2016 Ethereum upgrade, the network was constantly under attack from so-called replay attacks, in which hackers replayed user transactions to obtain tokens. Participants in the industry have already announced security measures.
The most concerning issue may also come from the emergence around the time of the Ethereum branch merger. In the event of a chain fork, a duplicate of the entire Ethereum ecosystem, including all of its coins, NFTs and applications, will be created. However, ETH creator Vitalik Buterin assures the community that the “forks” will not harm the original ETH network.
macroeconomic concerns
The global macroeconomic background will continue to play a large role in determining the momentum of the crypto market and, ultimately, the price of Ethereum. According to Sentiment, Ethereum is showing a higher correlation with the S&P 500. The Federal Reserve Bank of Kansas City annual meeting is underway in Jackson Hole, Wyoming.
After raising its benchmark rate by three-quarters of a percentage point in each of its last two policy meetings, investors will be listening closely for any indication that the US central bank is about the pace of its September interest rate hikes. How am I thinking? 20-21 Policy Meeting.