Other of the most desired platforms for ICOs thus far and the main competitor of Bitcoin, the Ethereum price had been heavily under pressure since the beginning of 2018. The price had peaked out at 1418 on the Coinbase exchange in mid-January and since then what followed is a huge wave of selling which drove the price to 419, where is located at the time of writing.
What triggered such aggressive selling?
Ethereum had not been the only digital asset under heavy pressure since the beginning of this year. All cryptocurrencies lost significant in value and market cap and analysts are saying the bubble which had been highly discussed last year, had burst and now we are seeing the consequences.
Looking at our chart above you can see how impulsive the selling had been and we are anticipating the move will head into a key support zone, formed by 400-350 levels. The main driver of a bearish trend is fear and this situation is no exception.
Fears of regulation imposed to cryptocurrencies had spread across the cryptocurrencies market and we expect to see legislation in place for digital assets in less than a year. There were unique conditions that were in place last year.
We have to mention the high demand for cryptocurrencies. Coinbase, one of the biggest exchanges in the world, had been reported 100,000 daily new clients in the last months of 2018. That shows there was a huge interest in cryptocurrencies, which had boosted the price to those high levels.
Because of regulatory pressures + increased difficulty for the mining process + higher fees generates by high prices, we see these price movements and they could continue further in the near term.
However, depressed conditions like the ones we are seeing right now are expected to attract buying interest. That is why, some of the losses might be erased until the end of 2018, especially if the highly anticipated regulation will have a positive impact.
Until then, driven by uncertainty, cryptocurrencies might head south for a while and put problems to those heavily involved in the industry.
Still, the blockchain technology continues to be the most promising invention of the recent years, no matter the market valuation of cryptocurrencies. It could be implemented in various industries and thus contribute to the improvement of productivity and well-being, as a whole.
Cryptocurrency trading carries high risk and may not be suitable for everyone. You should carefully consider before deciding to invest in speculative assets. No information contained in this article should be regarded as a decision to buy a certain asset.