The Ethereum (ETH) global supercomputer is losing its power, as miners have been gradually abandoning the network in the past few weeks. The Ethereum hashrate has gone down to the lowest level for the past three months, sliding to 257 TH/s. Since March 2018, the Ethereum hashrate has been relatively flat, moving between roughly 250 and 290 TH/s, signifying uncertainty after growing much faster in the first three months of 2018. This coincided with the accelerating slide in ETH market prices.
The Ethereum network exhibited a series of troubles, including periodic congestion. This factor, combined with the realization that Ethereum distributed apps had very few users, was one of the bearish factors exposing the fact that the Ethereum Virtual Machine may have been overhyped.
The continuing skepticism finally led to an unraveling in market prices. ICO projects, which financed themselves with Ethereum, realized they may see their runway capital go down to zero unless they sell soon. This factor continues to put pressure on the ETH price, as the asset traded at $199.01 as of 5:30 UTC on Monday.
On Bitfinex, the buying of Ethereum short positions, or making a bet that ETH prices will fall, has reached the highest level since July. The opening of short positions signifies that more market participants are convinced this is not the latest slide in prices for ETH.
There are those that believe ETH may continue to drift at lower prices, but recover eventually. The biggest trouble with ETH is that its price also drops against Bitcoin (BTC), almost ensuring an ongoing price weakness. Since more than 36% of ETH trading is in the ETH/BTC pair, the influence of BTC is enough to keep ETH under pressure. Additionally, Bitcoin maximalists continue to be highly critical of the Ethereum project.
Both BTC and ETH are highly influential, having each 400 pairings with various assets. ETH trading remains active, with more than 13% of all crypto volumes, and the low price has not caused the trading to stall. ETH usually achieves 24-hour volumes above $1.5 billion, and gives liquidity to tokens and altcoins. Thus, some see a case for ETH recovering at some point:
The biggest problem with the current fall in ETH prices is the expectation that ETH could only go up, based on ICO demand and the usage of the network. But since ICO fundraising stalled in the past months, those who bought ETH at peak prices, awaiting a bull market to $5,000 or higher, were left with significant losses.
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.