After Doubling in Price, Ethereum Faces Inevitable Correction Ahead of Big Upgrade
Ethereum declined double-digits on Thursday, as crypto markets followed in bitcoins footsteps following a sharp and sudden reversal during overnight trading. The decline comes after ETH nearly doubled in price over the past month, largely in anticipation for the Constantinople upgrade.
Ethers price fell 12.2% on Thursday to reach $133, according to CoinMarketCap. The bulk of the selloff occurred at roughly 01:24 UTC and has lasted several hours. The bottoming process continues at the time of writing. The following chart showcases the extent of the drop, which has put Ethereum in oversold territory.
The broad liquidation saw an immediate spike in trading volumes, with more than $3 billion worth of ETH trading hands in the last 24 hours. Thats an increase of roughly $700 million compared to Wednesday.
With the decline, Ethereum has fallen back to third spot in terms of crypto market capitalizations. It is now valued at $13.8 billion, some $250 million lower than XRP, which declined only 6.5% on Thursday. Still, declines seem to have moderated over the past hour, a sign that the market was stabilizing. It remains to be seen whether the selloff was merely technical in nature (i.e., profit-taking) or the start of a more sustained downtrend. The latter seems to conform with the view that assets like bitcoin still have a way to go before completing their bottoming process.
The value of ether virtually doubled between Dec. 15 and Jan. 4, climbing from $83 to $160. The market successfully defended the $150 level for most of the week before the latest correction took root. As Hacked reported early Thursday, the market-wide selloff appears to have been triggered by a sharp drop in bitcoin, which fell 5% in just over an hour.
Bitcoin exerts a gravitational pull on the broader market and is seen as the most important barometer of investor sentiment. Ethereum and other cryptocurrencies tend to follow bitcoin much more closely during bear-market trends. This contrasts sharply with the crypto boom of early 2018, where a broad decoupling of bitcoin and altcoins could be observed.
Constantinople Hard Fork Looming
Ethereums highly anticipated Constantinople upgrade is expected to go live sometime next week, with market observers targeting Jan. 14-18 as the likely date.
Anticipation leading up to the fork has worked in Ethereums favor, creating renewed demand for the developers cryptocurrency. Once Constantinople is implemented, the block reward for Ethereum will be lowered to 2 ETH from 3 ETH. This creates added incentive to participate in the network ahead of the hard fork. As we speculated last week, theres a good chance that Ethereum will experience a broad pullback once the upgrade goes live. Read more: Ethereum Flips XRP for Second Spot in Crypto Market Ranking Following 12% Gain.
Finalized on Aug. 31, Constantinople integrates five separate Ethereum Improvement Protocols (EIPs), which will be implement ...Read full story on Hacked: Hacking Finance