The Price of Ethereum Recovers Quickly Following FUD
Ethereum’s price fell 6% following news the cryptocurrency may fall under government scrutiny. Some regulators believe Ethereum has escaped government oversight and wonder if it should be regulated in a manner similar to stocks.
The report included an allegation by some regulators that Ethereum’s creation was funded by a “probably illegal securities sale”, according to the report by the Wall Street Journal.
The price of Ethereum quickly bounced back
Negative news like this, usually always affects the price. Yesterday’s news was no exception, the price of Ethereum fell 6%.
Traders and investors often worry that news like this will cause the price to plummet significantly. They try to be the first to submit sell orders and the ensuing panic causes the price to fall.This phenomenon is not new to cryptocurrency, we see this in most markets.
The real story lies in how quickly the price bounced back. The daily closing candle on the ETH/USD chart shows a seldom seem candle that barely has any weight to it, meaning the open and close for the day are almost exactly the same. The price dropped but returned to near its opening value by the end of the day.
Regulators chasing after shadows
The cryptocurrency market has been riddled with bad news lately. The conspiracy theorist shouts that it’s all “an evil plan to stifle the burgeoning technology.” While we at Coin Star do not go that far, it is easy to understand why people would feel that way.
The price volatility of cryptocurrency has been plagued with waves of bad news, followed by waves of good news. Every time it seems the market is getting a break, someone publishes another article which spreads fear, uncertainty, and doubt (FUD).
It’s possible that what we are witnessing is just a struggle between the old guard, who doesn’t understand cryptocurrency and the new guard, the advocates for its adoption. These types of drama have played out countless times over the centuries and they always finish one way; THE NEW GUARD WINS.