ETH Falls 6% Following Trump Assassination Attempt Amid Looming Rate Cuts

The crypto market has been sent into a whirlwind as Ether (ETH) plunges by 6% following the second Trump assassination attempt on 15 September 2024. ETH’s sharp decline saw prices drop from $2,425 to $2,260 within just 24 hours, with Bitcoin dominance over the market also reaching a peak as Ether underperformed.

The combination of a turbulent political environment and economic uncertainty has raised questions about Ether’s stability. Market observers are linking the Trump assassination attempt and looming interest rate cuts by the Federal Reserve as key catalysts for this volatility.

A Wave of ‘FUD’ Hits Ethereum

Social media platforms, particularly X (formerly known as Twitter), are buzzing with what can only be described as a full-on wave of Fear, Uncertainty, and Doubt (FUD) surrounding Ether. This Trump assassination attempt has stoked further jitters in an already shaky market.

Ethereum developer, ‘antiprosynthesis’, highlighted the increasing negativity, stating, “Half of my feed is ETH FUD at this point.” Sentiment around Ether seems bleak, especially given its underperformance compared to Bitcoin (BTC) and even Bitcoin Cash (BCH), which, according to ‘The Crypto Dog’, has outperformed Ether over the past year.

Alex Krüger, a prominent economist, fuelled the FUD by comparing Ethereum to Brazilian footballer Neymar Junior in a cheeky meme. Krüger’s post poked fun at Ethereum’s underwhelming price movement, referencing its slump against BTC. According to TradingView data, the ETH/BTC ratio fell to 0.038 on 16 September, marking its lowest point since April 2021.

Looming Rate Cuts Add to Uncertainty

Adding to the market turmoil, investors are bracing themselves for the Federal Reserve’s upcoming decision on interest rates. With a 41% chance of a 25-basis-point cut and a 59% probability of a larger 50-basis-point cut, according to the CME Fed Watch tool, expectations for the rate adjustment have contributed to market volatility.

Crypto analyst James Check noted, “The upcoming Federal Reserve meeting has everyone on edge. Rate cuts are usually seen as bullish for risk-on assets, but right now, it’s hard to say if that will translate into a crypto market rally, especially after the Trump assassination attempt.”

The uncertainty around the Fed’s decision is compounding with the broader market narrative, which remains fixated on political developments in the US.

Trump Assassination Attempt

The Trump assassination attempt on 15 September was the second such incident this year. The suspect, identified as Ryan Wesley Routh, was arrested after fleeing the scene. While former President Donald Trump was unharmed, the event has ignited further speculation over its impact on the markets.

Although it is difficult to ascertain the precise effect of the Trump assassination attempt on crypto prices, historical precedents suggest that such political turmoil can trigger significant volatility. The assassination attempt in July 2024 saw crypto prices surge, particularly Bitcoin, as investors flocked to decentralised assets amid uncertainty.

“Political instability always sends ripples through the financial markets. After the first Trump assassination attempt, we saw Bitcoin’s price jump. This time, it’s more of a mixed reaction,” commented Alex Saunders, a leading crypto commentator and CEO of Nugget’s News. He added, “The difference is the looming rate cuts and general economic uncertainty, which are making investors hesitant.”

Market Analysts Offer Mixed Predictions

The broader crypto market retreated by 4.5% following the assassination news, with total capitalisation sinking back to $2.12 trillion. As Ether struggles to find a foothold, crypto analysts are offering differing views on the market’s trajectory.

Veteran trader Kaleo shared his scepticism via X, posting memes that mock Ethereum’s price movements. “ETH has been lagging behind BTC all year, and it doesn’t look like that’s going to change anytime soon,” he stated.

Bitfinex analysts had earlier warned that the expected Federal Reserve rate cuts could exacerbate a dip in the crypto market. Their report suggested that while rate cuts may fuel growth in traditional markets, they could spark a risk-off sentiment in the highly speculative cryptocurrency sector.

“Crypto markets are hypersensitive to macroeconomic trends, and with the Trump assassination attempt coming just days before the Fed’s decision, investors are struggling to gauge what’s coming next,” said James Butterfill, head of research at CoinShares.

ETH’s Underperformance Against Bitcoin Continues Following Trump Assassination Attempt

Ether’s price continues to lag behind Bitcoin, with the ETH/BTC ratio declining to its lowest in over three years. The slump follows a trend seen throughout 2024, with BTC consistently outperforming ETH as investors flock to the relative stability of Bitcoin amid economic turbulence.

“The key issue with Ether right now is its vulnerability to external shocks, such as the Trump assassination attempt and rate cuts,” Butterfill noted. “These factors, combined with Ethereum’s struggle to differentiate itself from Bitcoin in terms of use case and security, are weighing on its price.”

Outlook for Ether and the Broader Market

As the crypto market braces for further shocks, the second Trump assassination attempt and looming interest rate cuts are likely to keep investors on edge. While some analysts see a potential rebound once the Federal Reserve’s decision is made, others warn that political instability and economic uncertainty will continue to dampen sentiment.

“Investors are facing a perfect storm of events, with the Trump assassination attempt being the most recent trigger. Unless we see some positive momentum after the rate cuts, the crypto market could remain in a bearish trend,” concluded Alex Saunders.

For now, all eyes are on Ether and its ability to weather the storm of FUD and uncertainty. As the market remains jittery, the next few days will be crucial in determining the direction of the cryptocurrency space.

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