Why has the price of airtime fallen? Causes and future prospects

The cryptocurrency market, and in particular the ether price, has experienced a dramatic decline in the first weeks of the month, leaving many market enthusiasts puzzled and worried. The sell-off, which caused $367 billion worth of Bitcoin and Ether to disappear, coincided with major downturns in global markets, especially in Japan.

But what exactly has caused this downturn and is there hope for recovery?

What is really happening with the price of airtime?

The recent fall in ETH is probably linked to some of the bigger problems around the world.

Markets in Asia and the Pacific, especially Japan, have been struggling. Japan’s main stock index, the Nikkei 225, fell by around 7% in the first week of August. Why? The Bank of Japan decided to raise interest rates to a level not seen for 16 years. Naturally, stakeholders became alarmed and started to sell their riskier assets, such as ether, in order to avoid getting burnt.

Across the ocean, in the US, the situation is no better. The Nasdaq index has also struggled, falling by 3.4% over the same period. This was due to the fact that corporate profits fell short of expectations and the jobs report was disappointing and showed signs of a slowing economy.

In addition, the Fed decided to leave interest rates where they are without promising to cut them in the near future, which made the situation even worse. All this has led investors to shy away from riskier assets, including ether.

No cryptocurrency scandal this time

Unlike some of the major crashes we have seen in the past, such as the FTX crash or the Terra debacle, this latest ether price drop is not because of anything wrong with the cryptocurrency itself.

This is mainly due to stronger economic forces. This may be of some comfort to cryptocurrency enthusiasts, as it means that digital coin technology is still sound. However, this scenario is still difficult for those who were hoping that the ether would continue to rise this year after previous successes.

The role of leverage and open interest

The other piece of the puzzle is what happened to the leverage positions. Privacy Policy (UK)

On 5 August 2024, the so-called “Bloody Monday”, the open interest (OI) fell sharply to $7 billion. This drop was caused by a large number of participants deciding to withdraw from their leveraged positions, which only added to the downward pressure on the price of ether. Leveraged trading can increase profits, but when things take a turn for the worse, losses can quickly accumulate and cause a snowball effect as more and more participants withdraw from trading.

Is there room for optimism?

Despite the recent downturn, there are already signs that the airwaves may be recovering. Ethereum has now regained a large part of its value, which means that it will go up. The buy-sell ratio of Ether is looking better, and if the OI starts to stabilise, we could see a recovery on the horizon.

However, it is important to note that this recovery process is not fast and is highly dependent on a number of external factors, such as global economic conditions and interest rates. If they improve, the ether price may follow suit.

In these unpredictable times, it is more important than ever to ensure the security of cryptographic transactions. That’s where Bintense comes in. We are a trusted cryptocurrency exchange where you can exchange your Ethereum quickly and securely, knowing that your funds are handled with the highest security standards.

“Bintense was created to offer a better and safer way to exchange digital coins. We strive for efficiency, transparency and convenience.

Looking to the future

The cryptocurrency market has always been a bit wild, and such downturns are nothing new. What matters is how the market recovers and whether the factors that caused the drop start to level out.

For now, it’s best to remain cautious. Don’t make decisions based on short-term market developments without looking at the bigger picture. Keep an eye on what is happening in the world and consider using platforms such as Bintense, where you can exchange cryptocurrencies instantly and without worry, even when the market is in turmoil.

Risk warning: Exchanging digital currencies is considered a risky transaction with highly speculative outcomes. Buying or selling a cryptocurrency carries a high level of risk. The Company does not act as a financial advisor, nor does it provide investment advice or recommendations. The Company does not guarantee any profit from any activity related to its services. You should carefully consider whether owning digital currency is appropriate in your financial circumstances.