$ETH On December 16, 2024, it broke through the $4,100 mark, and its market value rose wildly! But the good times didn't last long, and the selling pressure came one after another, which was dazzling.
Why is ETH so strong?
To put it bluntly, there are three major reasons: institutions and retail investors are scrambling for it, DeFi applications are very popular, and the technical upgrade of Ethereum 2.0, these good news have made ETH a hot spot in the market.
However, a fast rise also means a fast fall. Those who bought ETH early saw that the price was so high, and they must have thought about cashing out and leaving quickly; some people played with leverage, and as a result, their short positions were forced to close as soon as ETH rose; in addition, after the upgrade of Ethereum Shanghai, validators can withdraw the pledged ETH, which is another wave of selling pressure.
In addition, once the market sentiment fluctuates and the global economic situation changes, the price of ETH will fall sharply.
But we have to be rational and not be scared by short-term fluctuations. Ethereum 2.0 is still advancing, the potential of DeFi has not been fully tapped, and institutional investors are still joining. These are all good signs for ETH's future rise. Short-term fluctuations are only temporary, don't be confused by them.
So what should we do?
It's very simple. Don't invest all your money in one place. Diversify your investments to reduce risks. If you are optimistic about the future of ETH, don't be scared away by short-term fluctuations. Long-term holding is the kingly way. Set a bottom line for yourself. If it really falls, you can stop losses in time. You also need to pay more attention to market dynamics.
Although ETH has recently encountered some resistance near $4,000 and market sentiment is bearish, the market is always unpredictable.
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