Analyst Ali Martinez believes that Ethereum may face steep price correction, here’s why
According to him, analyst Ali Martinez has shared a chart that gives one reason why prices might face a massive drop, and it works for any blockchain.
This time, it is the second largest DLT platform, Ethereum, that has just recently undergone its long-expected Merge upgrade.
This is why ETH could face a huge price correction
A chart shared by Martinez shows that the number of new Ethereum wallets installed per day has dropped significantly during the past 24 hours. This is a drop of over 50% overall.
The analyst stated that if the amount of new wallets created on any blockchain plummets, it usually means that a big price correction may be on the horizon over time.
SEC takes ETH under US jurisdiction
Earlier, news circulated in the media space that SEC chief Gary Gensler said that Ethereum falls under US jurisdiction, which means that security laws can be applied to it.
Should the second biggest crypto be treated as a security, then ETH holders would have to report directly to the SEC and be taxed accordingly. This statement by Gensler could, however, cause a massive outflow of Ethereum from centralized trading platforms, especially ones that are located in the United States – Coinbase, Bittrex, etc.
However, this raises questions as to how the ambitious regulator intends to gain control over Ethereum distribution and control ETH movement on the decentralized network; In that case the ETH ecosystem would suffer a major loss.
However, after that, the SEC eased up on Ethereum, and investors seem to have calmed down. As a result, netflow on the network is now back to normal figures.
