Ethereum is set for another plunge, fund manager believes
The most recent crash of Ethereum pushed fear among investors across the market, especially when the second largest cryptocurrency in the market fell below the $1,000 threshold, while some investors believe that ETH has yet to hit the bottom and the market should be ready for another dip.
Daniel Cheung, co-founder of Pangea Fund, believes that July or August could be the worst months for the cryptocurrency. As the fund manager suggests, the market is currently in the “Macro trade” mode since the digital assets industry follows macro trends like inflation.
In the case of Ethereum, it traded at a correlation of 0.8 with the Nasdaq, showing that the cryptocurrency is almost “blindly” following trends in traditional markets that are unlikely to recover over the course of the year. the next two months, given the growing ferocity of the Fed and its surprisingly high level. inflation figures.
Cheung also added that Ethereum is most likely going to be levered and a liquid bet on Nasdaq, meaning that investors can get exposure to the traditional market via cryptocurrency that almost replicates their movement on the market.
Due to the high correlation with the Nasdaq, Cheung believes Ether will follow it once markets feel the pressure of rising rates and the continued pressure of inflation and even a possible recession.
As of now, the market is down around 30% from the recent ATH while it has lost 45% from the ATH of 2008 in an even more uncertain environment. This makes the fund co-founder believe that there is still significant room for a drop in upcoming months or after the next rate hike.
At press time, Ethereum is trading at $1,130 and losing about 1% of its value in the past 24 hours.
