The decline of Bitcoin in November 2024 had a significant impact on the Ethereum market. These two cryptocurrencies are closely interconnected: Bitcoin usually sets the overall trend, and Ethereum follows it. The key reasons for the current influence and possible scenarios for December are as follows:$ETH
1. Connection with Bitcoin: Ethereum, like other altcoins, often moves in the same direction as Bitcoin. Against the backdrop of the recent decline in BTC price, the price of ETH also fell due to overall negative market sentiment. This is because investors see Bitcoin as the primary indicator of the state of the crypto market, leading to decreased liquidity and trading volumes for Ethereum.
2. Internal factors of Ethereum: Recent actions by the Ethereum Foundation, such as selling significant volumes of ETH, have also put pressure on the coin's price. This creates additional volatility in the short term, although such actions are often aimed at supporting the ecosystem in the long term.
3. Geopolitical situation: Escalation on the international stage may have mixed effects. On one hand, such events may push investors to buy cryptocurrencies as an alternative to traditional assets. On the other hand, negative effects on liquidity may limit the inflow of capital into altcoins.
Forecast for December 2024
• Short-term fluctuations: Ethereum is likely to continue demonstrating volatility, responding to changes in Bitcoin's price and overall market sentiment.
• Focus on network development: If the market's main attention shifts to technical improvements in Ethereum or support from institutional investors, it may strengthen ETH's position.
• Impact of regulation and ETFs: The launch of futures ETFs for Ethereum in October 2024 did not lead to a significant increase in investor interest. However, any positive changes in the regulatory environment could act as a catalyst for growth.
Investors should consider that the dynamics in the cryptocurrency market are unpredictable, and any investment decisions should be based on risk analysis and long-term prospects.