The illusion of Ethereum bouncing back to 3500 was suddenly dashed back to 3100. What happened to the fundamentals?
Virtual currencies are still pegged to the DOLLAR via the STABlecoin, and the Fed's aggressive hawkish stance last week (rate hike + balance sheet reduction) has apparently scared money away from riskier assets (virtual currencies, stocks) and away from low-risk assets like cash and bonds
This is just the beginning of stagflation and recession. For a long time in the future, the hedge mentality of funds is the basic logic of bearish virtual currency
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The biggest fundamental variable of Ethereum itself lies in the upgrade. There are voices in the market that "the test version of ETH upgrade is completed - the possibility of timely upgrade is greatly increased - the amount of newly issued currency after upgrade is greatly reduced - the supply is reduced and the currency price is higher", but I deeply doubt it
From the demand side of ether after the upgrade
Speculative demand: Fried currency driving force lies in the abundance of money in the degree, the federal reserve to raise interest rates shrink under the background of the table, even if the etheric fang issue, how many dollars would approach to support the currency price, it's hard to say, the stock market has been repeatedly verified, shareholders to buy back shares, equivalent to the etheric fang combustion and deflation mechanism, does not necessarily lead to share price rises)
Usage requirements will not increase: Once the upgrade is complete, Rollip and sharding will significantly reduce the cost of on-chain activity while increasing the upper limit of on-chain activity frequency. After all, Ethereum is for use, not speculation. (For the founders of Ethereum, the hope is that as many developers develop on-chain applications with lower transaction fees, Rather than discourage developers with high currency prices and transaction fees)
Look at the supply side of ether
Selling pressure after the pledge: Tens of millions of ethereum coins have been locked in liquidity for 2 years, the price of the coin was less than 800 DOLLARS at the beginning of the pledge, and now it has increased by 4 times. After the upgrade, only fools will not cash out of the pledge (also refer to the selling surge of original shares in the stock market after the expiration of the sale limit).
Speculators selling pressure: with speculative demand on both sides of the same coin, the global dollar shrinks, into the cash and bond sector to avoid risk, throwing ether is inevitable
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Miner's throw pressure
Miners have been suffering a lot recently, with the impact of a drop in mining earnings and a lack of active trading on the chain remaining at a low level, lower than the whole of 21 years
Ethereum upgrade test progress is also emerging in an endless flow, the soonest is expected to open the difficulty bomb in June (mining revenue worse), in August to open the upgrade (graphics card mining become history)
Domestic policies continue to pressure, lack of land, electricity, lack of money, mine living conditions have gradually deteriorated
So now large households are no longer add cards, and even turn to small and medium-sized households, reflected in the whole network computing power, is stagnant at 1000TH/S
Mining business did not progress, but daily expenses and capital costs can not be less, how to do? Throw COINS
Mining earnings are low
Currency low price
On-chain trading has picked up
The whole network is stagnant
So in the case of speculators dominating the price of Ethereum currency, using upgrades, deflation and so on from the user's perspective of blind bullish, it is a struggle to find a sword
PS: Given bitcoin gold, Ethereum silver, and the highly positive correlation between bitcoin and Ethereum, I used the price trend of Ethereum as a sample to refer to virtual currency as a whole