The cryptocurrency market experienced some volatility as the Federal Reserve (FED) interest rate decision and the Ethereum upgrade occurred simultaneously. In this market update, we'll discuss how the market is responding to these events.
Market Volatility and FED Interest Rate Decision
The FED interest rate decision on Wednesday had the potential to bring major volatility to the market. Before the Consumer Price Index (CPI) rating came out, many expected a slight increase of 25-50 basis points. However, after the CPI rating came out worse than expected, a 75 basis point increase is all but guaranteed. There is even a possibility of a full percentage point increase, the highest since 1984. Prediction sites now show that the odds of this increase have risen to nearly 50-50.
Many experts anticipate that the markets will get more volatile in the coming weeks. Tyler of Chico Crypto predicted that the cryptocurrency market would bounce around the range of 19.5k to just above 20k for the next week. He also warned viewers to expect major volatility next week Wednesday due to the FED interest rate decision.
Ethereum Upgrade and Market Response
Ethereum underwent one of the most significant upgrades in its lifetime, transitioning from proof of work to proof of stake. The Ethereum upgrade was a success, and the main chain is now officially proof of stake, with no proof of work miners on Ethereum. The upgrade has affected the graphic card industry, with Nvidia GPUs becoming much cheaper. Ethereum was expected to pump after the upgrade; however, it is now experiencing a dump. At the time of writing, Ethereum is below 1500, with a price of around 1474.
The old saying, "buy the rumor, sell the news," seems to be playing out with Ethereum's dump. Additionally, prominent Ethereum miner Chandler Guo created the EFW POW chain. Many people were buying Ethereum to get free EFW coins when Ethereum forks to EFW. Some of these buyers are now selling their Ethereum, putting pressure on the cryptocurrency's price.
There is also a good amount of minor selling pressure as staunch miners dump their Ethereum holdings. With no more proof of work miners on Ethereum, these miners are selling their Ethereum holdings. Additionally, the Ethereum upgrade has not changed Ethereum's roadmap, and Ethereum still has three or four more upgrades until the Eth2 roadmap is completed.
Be Careful with EthW Fork
EFW is set to launch tomorrow, but caution is required when interacting with it. EFW is being developed by a group of amateurs, and there is a possibility of relay attacks. If you make a transaction on the EFW chain from the same wallet that you have on the proof of stake chain, someone could relay it back to the proof of stake chain and steal your Ethereum. When interacting with EthW, make sure to send your Ethereum to a brand new wallet and conduct transactions from there. You can sell on Uniswap if it's live, or send it to a centralized exchange to sell. It cannot be relay attacked from there because centralized exchanges use a brand new wallet.
In conclusion, the cryptocurrency market is experiencing some volatility due to the FED interest rate decision and the Ethereum upgrade. It's important to be cautious when interacting with EthW, which launches tomorrow, to avoid the possibility of relay attacks. Despite the market's current downturn, Ethereum's long-term prospects remain positive, with several more upgrades planned in the Eth2 roadmap.