At press time, the second-largest cryptocurrency by market cap and the number one competitor to bitcoin has dropped by roughly $15 since yesterday afternoon and is now trading for $433. The currency is down by approximately six percent, and is following in the footsteps of crypto leader bitcoin, which has dropped by over $400 in the past 24 hours.
At the time of this writing, all major forms of crypto are in the red, and enthusiasts are witnessing a major reversal of what was once a serious bull run in the crypto space through what one source is referring to as a “bloody Tuesday.” Ethereum’s support at $450 has clearly failed to hold its ground, and critical support at $430 is being tested. Granted Ethereum is unable to stay above this level, traders are likely to see the currency drop to as low as $410 and $408 respectively.
Ethereum’s market value has since fallen to roughly $45.8 billion. This is a fall of about 2.5 percent, and many institutional investors believe further slumps are heading our way. Sharmin Mossavar-Rahmani of Goldman Sachs’ investment strategy group suggests that the price gains of last week were something of a fluke. He writes:
“We expect further declines in the future given our view that these cryptocurrencies do not fulfill any of the three traditional roles of a currency: they are neither a medium of exchange, nor a unit of measurement, nor a store of value.”
Ethereum’s daily trading volume has also seemingly fallen to about $1.7 billion from $1.9. There is no specific Ethereum-related news circulating that appears to have contributed to the drop; the entire market is being affected, which means that ether and all related currencies are seemingly moving in sync with bitcoin, which has experienced a serious slump over the past day.
Some businesses, however, are not letting the price news get in the way and are continuing to use Ethereum’s blockchain as their primary system of operations. The Commonwealth Bank of Australia (CBA), for example, says it has been testing a new system based on Ethereum’s blockchain that recently allowed it to ship over 17 tons of almonds to Germany.
Still, Ethereum’s future is looking exceedingly bearish. The currency is predicted to fall to $421 next, which could potentially pave the way for an even $400. However, granted the bulls can once again take the reins and overpower current resistance, we may see Ethereum spiking to $460 and $470 respectively.
What we are witnessing more than anything is that cryptocurrency – despite its gains and alleged signs of strength – is still vulnerable to volatility and outside market factors.
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