Ethereum appears to have become essential in 2018. Predictions by Bullish from January saw the coin appreciating to $5,000 in the following months. In any case, ETH continues to slide from previous peaks around $1,300 and drops toward $500. So what are the reasons behind the slide in this otherwise indispensable asset?
Ethereum continued to slide as the market reclaimed a little, losing about 2.7% in the last 24 hours to $526.68 and in the past seven days, the asset is down more than 24%, ultimately becoming the biggest loser in the CoinMarketCap top 10. The market cap dominance of Ethereum also slides while Bitcoin’s dominance is improving at around 44%.
ICO Projects Selling: A few ICO projects are sitting on a lot of Ethereum. There are cases in which the project itself hasn’t touched the funds – as with Coindash, which is still maintaining the full wallets after the hacker restored the funds. Also, there is the more extreme case of the Polkadot ICO, which had its ETH caged after the Parity multi-sig wallet tampering. However, some projects like EOS, have been seen shedding their ETH on the open market, disheartening the price.
Funding for ICOs is Changing: Following the spread of airdrops, less and fewer investors are buying Ethereum just to get exposure to tokens. ICOs start relying on private placements and distribute tokens for free. In turn, this makes ETH less valuable. In addition, other platforms are inviting ICOs and creating demand for the asset.
Getting Out of Fashion: Ethereum has boomed to unbelievable price levels, but it has always sunk to temporary lows. Ethereum has always had image problems when challenging Bitcoin. And while the coin’s utility is extraordinary and projects are coming along, periods of enthusiasm and hype are followed by periods of depression and inquiring the asset. Ethereum is taken for granted, serving its accounted aim but lacking Bitcoin’s shine.
Whale Manipulation: The previous price depression may be all-out manipulation to purchase more ETH. It is not known when ETH would become a staking coin, but owning it at lower prices and in higher quantities may be a choice. Added to the general bearish mood of the market, ETH may be looking up to a further drop.
Natural Fluctuation: Still having a relatively new asset and market, the ETH market price has seen recent panic-inducing movements and crashes. Eventually, the price recovered. Therefore the previous weakness may be due to many factors, however, this does not avert another upward run. But ETH should be approached with caution, allowing for further slides in the coming months, including fast drops on selling and no support levels.