These Are the 3 Killer Reasons Why Ethereum Price Is Crashing Today

Last week, the Ethereum blockchain completed its transition to proof-of-stake (PoS). While developers continue to speculate whether the blockchain has indeed improved, initial price movements for ETH have left investors underwhelmed.

 

Interest Rate Hikes Spook the Market 

The entire market is currently in freefall. Following the Federal Reserve's release of a higher-than-expected consumer price index (CPI) measures last week, investors feared another aggressive interest rate hike was on the way.

Investors' concerns were confirmed when the Federal Reserve announced a 75 basis point increase in interest rates. The Fed also released an updated "dot plot" of individual rate projections through the end of 2025. 

The forecasts signaled possible interest rate jumps in the future, with the target for 2022 positioned at 4.4% and 2023 at 4.6%.

The Fed has now engaged in aggressive interest rate hikes, and there is every indication that additional hikes could be in store. Being a large-cap coin, Ethereum has also been impacted by the decline in the market.

Investors Liquidating Holdings 

After the announcement of interest rate hikes, investors acted quickly. Many have begun moving their funds out of cryptocurrencies, most likely in a bid to rebalance into safer and more stable assets. 

According to data from CoinGlass, liquidations in Ethereum have hit $150.43 million in the past 24 hours alone. Immense selling pressure, especially when not countered with a similar buying pressure, has weighed on the price of Ethereum, which hit a low of $1,224 in the past 24 hours.