Ethereum fails to muster financial support as interest rate hikes loom large on the horizon
A series of interest rate hikes are set for implementation across North America and Europe within the coming few months.
- Ethereum's weekly losses currently stand at -5%.
- ETH's total valuation stands at AUD$480 billion (US$345 billion) while its market share stands at 18.14%.
- Upcoming NFT project Akutars recently faced a major exploit worth AUD$48 million (US$33 million).
Ethereum, the world's second-largest cryptocurrency by total market capitalisation, has stayed lock-in step with the industry at large. The altcoin recorded monthly losses of approximately 8% while trading well below the all-important AUD$4.2k psychological threshold at AUD$4,009.
In terms of where the market may be headed in the near term, traders are still quite uncertain as to what lies ahead for Ethereum, especially since most of the top 10 crypto assets have been exhibiting a high degree of correlation with the S&P 500 over the past few days.
It should be noted that equity markets across the US have remained volatile because the coming few months could see the Federal Reserve implement a 250-basis-point rate hike. The European Central Bank is also expected to increase interest rates significantly for the first time in over a decade soon.
Technical data from Coinglass shows that the current macro environment surrounding the digital asset sector has seen funding rates across crypto derivatives exchanges remain negative, showcasing a clear "bearish bias". Even the crypto Fear and Greed Index — a popular metric used to gauge market sentiment — has also continued to hover in the "extreme fear" region since 18 April.
With inflation rates surging all over the globe, most people are skeptical of investing in the crypto market, potentially leading to reduced prices and increased volatility in the near term.
Highly touted NFT project hit with exploit
Upcoming NFT project Akutars has been on the receiving end of a major exploit and a smart contract bug over the last 72 hours, resulting in a total of 11,500 Ethereum worth approximately US$33 million becoming frozen — even to the platform's core dev team. Emerging reports say that a group of individuals simply trying to highlight the project's vulnerabilities and not steal the funds in question masterminded the exploit.
In a recent Twitter thread that explained the entire development, prominent independent developer 0xInuarashi noted that Akutars' smart contract had been made in such a way that any refunds due to clients had to first be processed via a vulnerable smart contract even before the team could withdraw the funds. An update yesterday from the Akutars team developers noted that they had revamped the compromised minting contract and that the issue would be resolved soon.
Disclosure: The author owns a range of cryptocurrencies at the time of writing.