The price of Ethereum has taken a significant dive over the past few weeks giving skeptics some confirmation that the currency was in a bubble. It has lost over 40% of its value since its peak at above $15 USD about a month ago. Now it appears that the recent downward trend is taking a U-turn.
Ethereum’s Market Cap Plunges
Ethereum has been the talked about in great detail by the cryptocurrency community, industry executives and investors alike for the past few months. It seemed nothing could stop the programmable currency’s climb to the top as it slid into the second position below Bitcoin’s market capitalization. Positive news kept the coin rallying as it broke into unicorn status and its market cap reached the one billion dollar mark. Headlines such as Microsoft’s Azure program using the Turing complete token and R3 CEV connecting eleven lenders together with Ethereum had created a great deal of enthusiasm.
However, the third week of March saw this trend end as Ethereum has been slowly diving downwards. Data feeds from Kraken, Poloniex, and other major exchanges showed significant volume drops. As the token’s value plunged news such as Microsoft integrating Ethereum’s programming language Solidity into the company’s Visual Studio did nothing to boost the price.
Skeptics believe that Ether is going through what Bitcoin had when it experienced massive volatility in its younger days. Bitcoin has had its own bubbles throughout the years and it’s possible that investors chose to panic sell their Ether after the currency’s bullishness appeared to fade.
During the first weeks of April, Ethereum charts showed a bearish trendline and this has prevented any upward gains for long term holders.
Retracement levels show a large drop during this period as expectations of the cryptocurrency have declined. A few developments have still made headlines yet the effect of positive news has lessened quite a bit. Ethereum’s smart contracts show promise as two Brooklyn neighbors used Ethereum to trade solar energy last week for the first time. On the other hand, there were some issues with the programmable platform during the WAVES platform ICO.
Ethereum’s price jumped from about $8.50 and has jumped over a dollar since and appears to be gaining momentum. Bitcoin, on the other hand, has remained very stable while ETH experienced its precipitous rise and its subsequent drop in value. The price of Ethereum appears to have found support and is staying in the $9.50 range at the time of this writing. Buy support has consolidated over the past 24 hours though heavy resistance lies ahead at the $10 range.
What do you think about Ethereum’s price decline? Do you believe it has corrected? Will the uptrend reversal keep going? Let us know in the comments below.
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