After Doubling in Price, Ethereum Faces Inevitable Correction Ahead of Big Upgrade
Published Sam Bourgi
Ethereum declined double-digits on Thursday, as crypto markets followed in bitcoin’s 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. Inevitable Correction
Ether’s 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. That’s 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
Ethereum’s 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 Ethereum’s favor, creating renewed demand for the developer’s 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, there’s 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 implemented permanently next week. The upgrades are considered highly technical because they won’t be noticeable to the vast majority of users. They include improvements to network efficiency and fees.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.
Important: Never invest (trade with) money you can’t afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here . Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here . Best regards, Jonas Borchgrevink. Rate this post: Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate.
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.. Sam Bourgi 4.7 stars on average, based on 730 rated posts Sam Bourgi is Chief Editor to Hacked.com, where he leads content development for one of the world’s foremost cryptocurrency resources. Over the past eight years Sam has authored more than 10,000 articles and over 40 whitepapers in the fields of labor market economics, emerging technologies, cryptocurrency and traditional finance.
Sam’s work has been featured in and cited by some of the world’s leading newscasts, including Barron’s, CBOE and Forbes. Contact: [email protected] Twitter: @hsbourgi
You must be logged in to post a comment Login Leave a Reply Crypto Update: Coins Plunge as Short-Term Trendlines Fall
Published Mate Cser
As we warned in recent days, the counter-trend rally in the cryptocurrency segment has been running out of steam, and the waning momentum together with the still overwhelmingly bearish long-term pressures led to steep drop today, which dragged all of the majors significantly lower. The move, which caused trendline breaks in most of the top coins was accompanied by a surge in trading volumes, while correlations between the majors also spiked higher, confirming the validity of the breakdowns.
After the recent downgrades in our trend model, the short-term outlook deteriorated further today, and traders and investors should remain defensive here, with all of the majors still being on sell signals with regards to the long-term time-frame . A test of the bear market lows still seems likely in the coming months, even if a larger scale bottoming process might already have started in the segment. ETH/USD, 4-Hour Chart Analysis
The most important leader of the rally, Ethereum clearly broke below its dominant short-term trendline, and the $145 support level.
ETH quickly fell back to the first major support zone near the $130 price level, and now the coin is on sell signals on both time-frames in our trend model.
Traders should still stay away from entering new positions here, until we see renewed signs of strength, as bearish risks remain high in light of the long-term setup. Further support zones are still found near $120, and between $95 and $100, while resistance is ahead at $160 and near $180.
BTC/USD, 4-Hour Chart Analysis
Bitcoin broke below the key $4000-$4050 resistance zone, warranting a downgrade to neutral in our trend model, but for now, the coin remains clearly above the $3600 support. Given the coin’s technical weakness and the broad breakdown in the segment, even short-term traders should stay away from entering new positions here, while the long-term setup remains clearly bearish.
The oversold long-term momentum readings are now cleared, thanks to the counter-trend rally and we need to see strong evidence of technical strength before re-entering the market. Further resistance is now ahead near $3850, and at $4450 while support below the $3600 level is found near $3250 and $3000. Altcoins Hammered Amid Broad Sell-Off LTC/USD, 4-Hour Chart Analysis
Litecoin is trading near the $34.50 support level following the sell-off and with the dominant rising trendline being just below the current price level, the coin’s outlook remains shaky.
While Litecoin was leading the way higher during the counter-trend move, it remains in a steep long-term downtrend and traders and investors should stay away from entering new positions here. Further support is found between $30 and $30.50 and near $26, with strong resistance zones ahead near $38 and $44.
XRP/USDT, 4-Hour Chart Analysis
The technical position of Ripple deteriorated further and the coin is now eyeing the test of the $0.32 level after breaking below the $0.3550 support end triggering a short-term sell signal. The long-term picture is also bearish and traders and investors shouldn’t enter positions in the relatively weak XRP. Resistance is ahead above $0.
3550 near $0.3750 and in the key long-term zone between $0.42 and $0.46 being with further support found near $0.
30 and $0.
26. EOS/USD, 4-Hour Chart Analysis
EOS followed the broader market lower and broke out of the long-standing consolidation pattern that has been dominated trading in recent weeks. The coin triggered a short-term sell signal with the move and we expect the broader downtrend to continue, with support levels now found near $2.
35 and just above $2 and with resistance ahead near $2.50, $2.675, and $3.
Featured image from Shutterstock
Disclaimer: The analyst owns cryptocurrencies.
He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins. Important: Never invest (trade with) money you can’t afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here .
Trade recommendations and analysis are written by our analysts which might have different opinions. Read my 6 Golden Steps to Financial Freedom here . Best regards, Jonas Borchgrevink. Rate this post: Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
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.. Mate Cser 4.7 stars on average, based on 438 rated posts Trader and financial analyst, with 10 years of experience in the field. An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market. Crypto Update: Rally Running Out of Steam
Published Mate Cser
The cryptocurrency segment saw yet another rally attempt yesterday, but despite the new highs in the likes of Litecoin, Tron, and Binance Coin, the top coins failed to join the rally and the momentum of the move is suspicious. With none of the top 5 coins making meaningful progress, the total value of the marker is little changed, and for now, we are not seeing the buying pressure of the late-December move.
The weakening momentum and the still overwhelmingly bearish long-term picture justified several short-term downgrades in our trend model, and even though the counter-trend move could still continue, until we observe signs of technical strength, traders should be defensive towards the segment. With the negative long-term forces still being dominant, at least a test of the bear market lows is likely, even if a broader bottoming process is already underway.
BTC/USD, 4-Hour Chart Analysis
Bitcoin continues to trade near the $4000-$4050 resistance zone, as although the rally attempts failed in the most valuable coin, it remains stable holding up well above the key support level near $3600 and the short-term trendline that is currently found near $3850.
That said, with no meaningful bullish momentum present, and with the negative long-term picture in mind, BTC is now more vulnerable to a selloff, since the oversold long-term momentum readings are now cleared. Above the primary zone, further resistance is ahead near $4450 and between $5000 and $5050, while support below the key $3600 level is found near $3250 and $3000. ETH/USD, 4-Hour Chart Analysis
Despite an intraday bounce, Ethereum continues to be stuck in a short-term consolidation pattern and given the weakening momentum and the coin’s relative weakness, the counter-trend move could already be over, or a deeper pullback might be ahead.
With that in mind, traders should stay away from entering new positions here.
A move above $160, towards the $180 level is still possible, but in light of the long-term trend, bearish risks are quickly increasing. Initial short-term support is found near $145, with further zones still found near $130, $120, and between $95 and $100, while resistance above $180 is ahead near $200. Bitcoin Tests Resistance Zone but Move Lacks Momentum LTC/USD, 4-Hour Chart Analysis
Litecoin experienced two failed momentum moves in the past few days, and due to the clearly weakening momentum, the coin is now only on a neutral short-term trend signal.
The oversold long-term readings are also cleared, and although there is no technical evidence that a new short-term downtrend given the bearish long-term setup, traders shouldn’t enter new positions here.
The coin topped out above the $40 level, while respecting the broad declining trendline, and all eyes are now on the $38 support/resistance level, with further support found near $34.50 and between $30 and $30.50, and with another strong resistance zone ahead near $44. XRP/USDT, 4-Hour Chart Analysis
The technical position has been unchanged for Ripple in recent days, and the coin is trading in a very narrow range between the $0.3550 and $0.
3750 levels, still showing relative weakness compared to the leaders of the counter-trend move and its main peers as well.
XRP is still on a neutral short-term and a bearish long-term trend signal with the key long-term resistance zone between $0.
42 and $0.46 being out of reach, for now, and with further support found near $0.32 and $0.30. EOS/USD, 4-Hour Chart Analysis
While EOS bounced higher together with the broader market in December, it never triggered a buy signal in our trend model due to its persistent technical weakness. The coin entered a volatility compression pattern since then, and although it held up well during the pullbacks, the $3 level proved strong for bulls.
A sustained move above the key level would trigger a buy signal, but given the market-wide weakness in momentum, traders should still stay away from the coin, especially given the bleak long-term picture, with short-term support found near $2.675 and $2.
50, and further resistance ahead near $3.20 and $3.50.
Featured image from Shutterstock
Disclaimer: The analyst owns cryptocurrencies.
He holds investment positions in the coins, but doesn’t engage in short-term or day-trading, nor does he hold short positions on any of the coins. Important: Never invest (trade with) money you can’t afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here .
Trade recommendations and analysis are written by our analysts which might have different opinions.
Read my 6 Golden Steps to Financial Freedom here . Best regards, Jonas Borchgrevink. Rate this post: Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way.
( 4 votes, average: 4.75 out of 5 ) You need to be a registered member to rate this. Loading… Mate Cser 4.7 stars on average, based on 438 rated posts Trader and financial analyst, with 10 years of experience in the field.
An expert in technical analysis and risk management, but also an avid practitioner of value investment and passive strategies, with a passion towards anything that is connected to the market.
2018 Crypto Crash: Here’s What Actually Caused It
Published Kayla Matthews
Tech-savvy investors have kept their eyes on cryptocurrencies like Bitcoin for several years now. The most prolific form of cryptocurrency has brought backers on a rollercoaster of highs and lows over the past two years. While this culminated with an all-time high of more than $19,000 in 2017, Bitcoin, in particular, would go on to lose almost 70 percent of its value just several months later. And as we saw in the altcoin universe, some losses clocked in at over 95%.
But what exactly caused the recent crypto crash of 2018? Even more importantly, what does the future hold for the various other types of cryptocurrency? Below is a rundown of some of the common themes that precipitated the 2018 selloff. A Limited Supply Increases Demand
In its purest form, Bitcoin and its competitors are all a form of currency. But the format differs so much from traditional forms of money — like the Dollar or the Euro — that people trade cryptocurrencies as if they were commodities. The limited supply of cryptocurrencies, coupled with increased consumer demand, is bound to inflate the price.
But such inflated value can only last for so long. Crypto Challenges Cause Consumer Hesitation
Bitcoin and other cryptocurrencies are fighting an uphill battle . Not only do they face increasing government scrutiny, standardization and regulation, but they’ve also gained a lot of unfavorable press in the past months and years.
In South Korea, three executives of an exchange called Upbit got charged for making fraudulent transactions that allegedly occurred between September and December 2017.
Moreover, there are allegations that those executives sold 11,500 BTC to individuals during rigged transactions that solely benefitted the executives. That’s just one example of recent cryptocurrency corruption.
Plus, people who invest in cryptocurrencies rightfully wonder how secure their funds are. A report indicates that the total amount of cryptocurrency stolen in 2018 will likely reach $1 billion , with the thefts often resulting after hacks happen at the platform layer level or when cybercriminals infiltrate exchanges. When people hear about those headline-capturing events, it’s not surprising if they fear being the next victims.
There was also a widespread belief that cryptocurrencies like Bitcoin were untraceable and that it was impossible to connect transactions back to specific users. However, that claim has been debunked , since there are numerous ways to violate the supposed inviolable privacy cryptocurrency offers and link transactions to the people who performed them.
Between fraudulent transactions, stolen funds, and online privacy concerns in general, many consumers are hesitant to embrace these new platforms. When they balked due to the unsettling events described above and others like them, the hesitation partially caused the crypto crash. The Effect of SEC Regulation Fears
Potential cryptocurrency investors are also hesitating due to proposed Securities and Exchange Commission (SEC) regulations. They recently considered adding strict control to govern the trade of Ethereum — which caused a lot of concern over the likelihood of even tighter rules and regulations in the future.
Fortunately, the SEC ruled Ethereum is not the same as corporate bonds or stocks.
Instead, it’s more akin to commodities like gold and silver. While this has eased some investor concerns, the lack of stability in the cryptocurrency market is still a significant concern. A Recent Panic Triggered by the Bitcoin Cash Hard Fork and Resulting Drama
Analysts have also weighed in to state how they believe the Bitcoin Cash hard fork, which happened on August 1, 2017, set the stage for the 2018 crash by causing bickering between the two crypto communities associated with Bitcoin and Bitcoin Cash. The hard fork caused an initial drop in Bitcoin’s value, partially driven by the negativity surrounding the event.
A technical selloff occurred after the fork, followed by full-blown capitulation after that .
The technical selloff and capitulation have defined many of the discussions about Bitcoin’s crash, especially over the past six weeks or so.
Even long-term holders of Bitcoin have started to decide it’s time to sell. Bitcoin’s price dropped 36 percent in November 2018 alone.
However, some people are still confident that the cryptocurrency will bounce back — as it has before, after other substantial drops. Is the Bubble Bursting?
Opponents of cryptocurrency suggest the bubble has already burst. They compare the current situation to the “dot-com” bubble of the late ’90s and early 2000s, which bankrupted countless IT entrepreneurs. But experts in the field disagree.
According to Angel Versetti, CEO of Ambrosus, the cryptocurrency bubble hasn’t even begun .
Matthew Newton, a top analyst with the online investment platform eToro, suggests it’s far too early to determine whether there is a bubble and if it has already burst. But he was also quick to point out the formation of a cryptocurrency bubble is an inevitable step in the processes of evolution and maturation. Where Do We Go From Here?
There isn’t a failsafe method for keeping cryptocurrency alive. Instead, it will take a concentrated effort from investors, consumers and retailers alike. Not long ago, the value of Bitcoin was struggling to top $1, so it’s still come a long way in a short time. Additionally, there have been some key developments — despite the recent setbacks — that show great potential for the future.
The big challenge for investors moving forward is navigating between the short-term risks and long-term potential of digital assets.
The apparent bursting of the asset bubble in 2018 exposed an overbought market that had risen too frantically for the fundamentals to support. But the pullback hasn’t weakened the value proposition of Bitcoin or other leading cryptocurrencies. As we’ll see over the next six months, topics ranging from institutional adoption to business innovation will dominate the headlines as the market continues its evolution.
Featured image courtesy of Shutterstock. Important: Never invest (trade with) money you can’t afford to comfortably lose. Always do your own research and due diligence before placing a trade. Read our Terms & Conditions here . Trade recommendations and analysis are written by our analysts which might have different opinions.
Read my 6 Golden Steps to Financial Freedom here . Best regards, Jonas Borchgrevink. Rate this post: Important for improving the service. Please add a comment in the comment field below explaining what you rated and why you gave it that rate. Failed Trade Recommendations should not be rated as that is considered a failure either way. ( 4 votes, average: 5.00 out of 5 ) You need to be a registered member to rate this. Loading.
.. Kayla Matthews 5 stars on average, based on 1 rated posts Kayla Matthews has been a technology and productivity journalist for over 7 years contributing to publications such as MakeUseOf, The Next Web, VentureBeat and Cointelegraph. She’s also the editor of her tech blog, Productivity Bytes, where she writes everything from how-tos to the latest news in technology. To see more of her work, subscribe to Hacked.com or follow her on Twitter @KaylaEMatthews.
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