Ethereum (ETH) Down to Double Digits After CoinbasePro Flash Crash
After the latest rapid sell-off, ETH prices could not hold above $100, as the platform sees more criticism.
Ethereum (ETH) quickly broke below $100 in the latest market sell-off. ETH sank to $85.83 as of 5:00 UTC on Friday, when massive selling lifted 24-hour volumes to the equivalent of $2 billion. ETH is down more than 15% in the past day alone.
While the entire market lost, ETH was a special case, showing greater price weakness and seeing its influence weakened. The almost negligible number of distributed app users was pointed out as a reason, as well as the crash in ICO sales that required ETH.
While the price dropped, the Ethereum network also saw slower mining that dropped faster in November. The lowered block reward of 2 ETH was one of the factors, but the general weakness of the crypto market also played a role.
The other problem was the wider awareness of the Infura hosted node cluster, a tool created by ConsenSys. The crypto community noticed that any dApps created would depend on this node cluster, and its failure would break down the Ethereum ecosystem. Weiss Ratings added to the critical tone surrounding this Ethereum point of failure:
The creation of Infura is not a central part of the Ethereum project, but a private endeavor that became the go-to solution.
Another reason for the price weakness is the lagging update to Casper, which was supposed to arrive in 2018. Vitalik Buterin, Ethereum’s co-founder, showed that Casper is still in the theoretical stage, and the developers may take their time for the update:
The other problem of Ethereum is trying to update the network and evolve, while newer projects already launched with a different consensus model, and do not need to make a decision on a live network, or phase out mining. All platform coins were also hurt by the bear market, but Ethereum’s case remained more prominent, due to the hype leading to peak prices above $1,400.
But one of the chief reasons for the current price weakness was panic, based on short-term trading. Due to an anomaly, ETH sank to $13 on CoinbasePro. In the past, sell-offs have pushed the ETH price to extreme lows, as one-off events, but this time, the crash added to the panic.
Unfortunately, talks of ETH returning to extremely low prices are showing the pessimism about the asset’s future. Platform coins were seen as the answer to Bitcoin’s flaws, and attracted immense interest in 2017, but later went on to erase all gains. Traders see ETH easily returning to pre-boom levels. The current price is also seen as precarious, with the possibility of another 50% drop. ETH was down more than 50% in the past month alone.
Neither the author nor the publication assumes any responsibility or liability for any investments, profits, or losses made as a result of this information. Cryptocurrency trading and investing are risky propositions, and market participants are advised to always conduct thorough research.