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After what has been two weeks of an unbelievable rally for the value of Ethereum, the digital asset appears to be working out of steam. ETH’s worth has now declined as soon as extra under $1,600 after a pointy downturn on Tuesday. The perpetrator for this appears to be rising FUD throughout the neighborhood.

FUD Could Have Been The Trigger

According to Santiment, the social dominance of Ethereum grew quickly within the final couple of days. While this will generally be a very good factor, it tells a damaging story this time round. Ethereum is now dominating 21% of cryptocurrency dialogue on social media and the on-chain information aggregator says this could be proof that FUD could be behind the dip. However, this might not be the one motive.

A report from Bitcoinist had beforehand proven that profit-taking in massive belongings corresponding to Bitcoin and Ethereum had been ramping up with the rise in worth. Santiment additionally highlights this in its publish, pointing to the spike within the profit-taking ratio on January 20. Taking this in live performance with the rising FUD, it presents a recipe for catastrophe for the digital asset.

ETH social dominance signifies FUD | Source: Santiment

Another outstanding occasion was the Wormhole attacker began transferring the stolen funds round. On Monday, the attacker moved over $155 million in ETH to OpenOcean which they proceeded to change for staked ETH tokens corresponding to stETH and wstETH.

The dumping of those cash on the open market noticed promote strain mount on ETH throughout this time. It contributed to the already declining momentum, ensuing within the present dip within the worth.

Can Ethereum Recover From Here?

Despite the latest decline, the general sentiment for Ethereum continues to be skewing largely towards purchase. This is as a result of the cryptocurrency continues to be buying and selling properly above its 50-day and 100-day transferring averages. And even with the decline, it continues to development round its 200-day transferring common.

What this exhibits is that, no less than within the quick to mid-term, there’s nonetheless loads of bullish sentiment surrounding the digital asset. Add within the ample help that has constructed up round $1,500 during the last couple of days and Ethereum continues to be presenting as a formidable alternative of funding.

ETH worth falls under $1,600 | Source: ETHUSD on TradingView.com

Investors are additionally seeing good earnings throughout this time with 57% of all holders in revenue. Figures like these additionally assist to push a bullish narrative for the digital asset as extra buyers attempt to reap the benefits of the dip and transfer into the inexperienced. Overall, so long as ETH maintains its momentum and buying and selling quantity continues rising, it’ll retest the $1,600 resistance as soon as extra. 

ETH’s worth is altering palms at $1,555 on the time of this writing. Its worth is down 5.27% within the final 24 hours however buying and selling quantity is up 11.91% over the identical time interval to be sitting at $9.32 billion.