Things continue to look gloomy for Ethereum. The second most popular cryptocurrency by market cap tumbled more than 21% from a Friday high of $365.57 to its current price of $285.69 at press time. This marks the first time that Ethereum has fallen below $300 in more than nine months.
Going into the weekend from a Friday high of $365.57, Ethereum fell sharply later in the day, losing nearly 10% in just over an hour. The slide continued into Saturday afternoon – to a low of $309.01 – before a brief respite saw a jump back up over the $325 mark. Trading continued in the $320 – $325 range until this morning, when yet another drop – this time nearly 6.5% – brought the price of Ethereum below $300 for the first time since November 2017. The downward momentum has continued throughout the day, resulting in a further 4.6% loss. ETH is currently trading at $285.69.
What is Causing Ethereum’s Price to Fall?
The exact cause of the crash is anyone’s guess. The SEC’s decision last week to postpone its ruling about the VanEck Bitcoin ETF sent the entire cryptocurrency market into a tailspin – including Ethereum, whose price dropped more than 7% in less than two hours following the news. We can’t discount general market malaise, either. Since prices first began their decline in January, experts and crypto influencers have been seeking to reassure traders that it’s all part of the cycle and that this, too, shall pass. While undoubtedly true, it would not surprise me if some investors – especially newer investors who bought ETH during its peak panicked sold for fear of losing even more of their initial investment.
Of course, those are just general market factors. There are several possible Ethereum-specific factors as well. Speculation is running rampant that one or more ICOs are in the process of cashing out and there is also a possible ongoing spam attack on the Ethereum network. Others have suggested that, rather than an attack, the activity could be related to a blockchain-based mobile game called Last Winner that is essentially a clone of the FOMO3D game that gummed up the network last month. The delay in the release of the Casper upgrade isn’t doing the market any favors either.
Chin Up, It Gets Better
With the current cryptocurrency market being so depressed, it is easy to look at Ethereum’s latest losses and despair. But it is important to remember that there are good things on the horizon for Ethereum. Google searches – both web and news – for Ethereum are on a general upswing, indicating that interest in the cryptocurrency has not waned. If anything, it is increasing. The roll-out of the combined Casper / sharding upgrade – while delayed – is in the offing, and Volkswagen’s interest in IOTA, Ethereum, and Bitcoin with regards to the implementation of blockchain functionality in its vehicles cannot be ignored.
Bringing #blockchain systems to the road: We’re working full steam ahead on making super-safe #cryptosystems available to our customers. For filling the tank, unlocking your car – and all kinds of other possibilities: #bitcoin #ethereum #iota
— Volkswagen Group (@VWGroup) August 8, 2018
All in all, there is a lot to look forward to in Ethereum’s future.
What do you think are the contributing factors to Ethereum’s latest drop? When will we see a reversal? Let us know what you think in the comments below.
Images courtesy of CoinMarketCap, Shutterstock