Ethereum - Virtual Money - Cryptocurrency - 3D Rendering

Ethereum price prediction as VIX rises and fear and greed index retreats

The Ethereum price retreated slightly on Wednesday as global risks jumped and the fear and greed index declined again. ETH declined to $3,345, which was about 6% below the highest level on Tuesday. The decline brings the total market capitalization to more than $398 billion.

Fear and greed index falls

There is a sense of fear going on in the financial market today as risks rise. For one, the closely watched CBOE volatility index (VIX) has jumped by more than 10% in the past 24 hours. This index uses the options market to predict the positioning of the S&P 500 index. A higher number is usually a sign that investors are getting fearful.

Meanwhile, the fear and greed index has declined to 27. This index measures the sentiment among investors by looking at several gauges in the market like junk bond demand, VIX, stock price breadth, and put and call options. The current figure shows that investors are generally fearful about the market.

Fear and Greed index
Fear and Greed index

The impact of this trend is being seen across the financial market. In Europe, the DAX index, FTSE 100, and CAC 40 declined by more than 1.50%. Similarly, in the United States, futures tied to the Dow Jones, S&P 500, and Nasdaq 100 indices have declined by more than 1%. 

1
Minimum Deposit
$50
Exclusive Promotion
User Score
10
More than 3,000 assets, including currencies, stocks, cryptocurrencies, ETFs, indices and commodities
Buy crypto, or trade cryptocurrencies via CFDs
CopyPortfolios: Innovative, fully managed investment strategies
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

Still, a divergence has emerged between the main fear and greed index and the crypto fear and greed index. The latter has jumped to 67, meaning that investors are getting greedy.

The main reason for this fear is that investors expect that inflation will rise too much and force central banks to start tightening. Earlier today, the Reserve Bank of New Zealand (RBNZ) hiked interest rates by about 0.25%. With the breakeven rate at a 13-year high, there is a possibility that the Fed too will start tightening earlier than expected.

Ethereum price prediction

Ethereum Price

The four-hour chart shows that the Ethereum price has lost momentum in the past few sessions. The decline started when the price rose to a high of $3,547, which was slightly above the 61.8% Fibonacci retracement level. 

Still, on the positive side, the coin’s bullish trend is still being supported by the 25-day and 50-day moving averages. Also, Bitcoin has stubbornly remained above the $51,000 level.

Therefore, the ETH price will likely resume the bullish trend in the near term. I suspect that it will surge to about $4,000 in October although risks remain. That would be a 20% jump from the current level and is in line with my previous ETH price prediction for October.