ETH is the second largest cryptocurrency by market capitalization which has plummeted 35% today, recording the largest drop in a day since the 2018 ICO bankruptcy.
The exchange rate from ETH to US dollars fell from $ 195 to $ 138 in 30 minutes, after Bitcoin's frenzied sell-off in the same time frame. Currently, ETH costs $ 140. The market capitalization of ETH reached the lowest level since the beginning of the year to be about 15.2 billion dollars, at the highest of 27.37 billion dollars.
ETH / USD pull back after falling 35% | Source: TradingView.com
Elsewhere in the cryptocurrency market, all coins with large and small caps suffer terrible losses. As stated, Bitcoin plummeted by 22.54%. At the same time, XRP, LTC, BCH and other leading cryptocurrencies plunged from 22 to 35 percent, losing a total of about $ 68.61 billion compared to the entire market.
Trump dump
The collapse of the cryptocurrency market occurred one day after President Donald Trump declare Travel restrictions from most European countries to curb the Corona virus (COVID-19) are increasing in the US. Trump also promised to support small businesses, but that did not help revive the struggling stock market.
Bitcoin, ETH and the rest are following global trends. All leading coins plunged when investors were supposed to sell them to offset losses in the traditional market. Even gold considered safe haven assets in times of global crisis does not rise and fall along with stocks and bond yields.
Global margin call. All correlations go to 1. Note that gold, the metal is within 5% of its recent high. Remain calm. What do you want to own when the margin call ends? My bet crash today (SPX down 20%). Follow thru a few days. FED response, face ripping rally. Gold wins.
– Lawrence Lepard (@LawrenceLepard) March 12, 2020
“Guess global margin. All correlations with first. Vàng is still in the limit of 5% highest increase recently. Keep calm. You want to own What property when the guess margin end? Disaster Today (SPX is down 20%). Subscribe over several days. Fed response, face soaring. Gold wins ".
The investor Jeremy Gardner, associated with San Francisco-based Ausum Ventures, compared Bitcoin's devastating collapse to gold during the 2008 financial crisis. electronics with a safe haven asset role are following the crisis:
Everyone is joking "so much for bitcoin being a safe haven," but what matters more than its immediate response in a financial crisis is how it responds thereafter.
If bitcoin rebounds like gold after '08, a compelling argument begins to take hold.
This the first big test.
– Jeremy Gardner (@Disruptepreneur) March 12, 2020
"People are joking “Bitcoin ceased to be Safe shelter", but more important than its immediate response during the financial crisis is how it responds afterwards.
If Bitcoin rebounds like gold later years 2008, compelling debate began to be sustained.
This is the first big test. "
ETH still has the highest correlation with BTC and can get a bullish signal from the recovery of the big brother. But for that to happen, the Corona virus pandemic must end. People need fiat to buy everyday appliances more than anything else if they are isolated in the house.
The new strain has so far killed at least 4,700 and infected 126,000 others globally. In response, most of the affected countries like Italy have locked up about 60 million citizens. In the US, the pandemic is spreading at a faster rate, with more than 1,000 confirmed cases.
What happening Next for ETH?
ETH and similar cryptocurrencies have joined the ranks of risky assets. The second largest token could feel further downward pressure as fiat investors' liquidity demands soar, the next potential pullback expected to show us the 2018 bottom on the board.
Range bottom 2018 appear in anticipation | Source: TradingView.com, Coinbase
A price drop below $ 123 along with an increase in the number of COVID-19 cases could motivate investors to sell more ETH in the market. Technical support at $ 75 may protect cryptocurrencies from further declining, but psychology during a global crisis cannot be measured.
The best scenario for ETH is to pull back from the $ 123 area and retest the 50-week moving average (blue wave) as resistance.
Besides, it seems that Bitcoin price collapse not only affects the price market, but also the transaction fee of ETH is also fluctuating.
ETH fee market skyrocketed
According to data from the ETH ETHGasStation transaction fee tracking website, the price of gas (effective computing power on the distributed ETH network) has increased rapidly.
⚠️ Be advised that gas prices are extremely high right now ⚠️ pic.twitter.com/eLmMerH3iG
– ETHGasStation (@ETHGasStation) March 12, 2020
"Right now, note that the price gas are very high ".
The gas price measured in gwei (ETH unit, like Bitcoin's satoshi) has reached 100, which means that the most basic transaction sending cost in the next block will cost up to $ 0.30, an unprecedented fee. see.
Analysis firm Glassnode also confirmed this, found that Average daily gas price has reached 29 gwei. This is the “highest level reached in more than a year”.
#Ethereum'S price drop has lead to massive network congestion. $ ETH median gas price just spiked to 29 gwei – the highest produced been in over 1 year.https://t.co/RnoIRxrdkG pic.twitter.com/KpOEfpWGWe
– glassnode (@glassnode) March 12, 2020
"ETH decreases cause Large network congestion. Average gas price of the ETH fit skyrocketing to 29 gwei – the highest in more than a year ".
It seems that this spike is related to the collapse of Bitcoin and other cryptocurrencies. Right now, in order to minimize the downward momentum or take advantage of this move, investors may be trying to deposit ETH by the fastest way to exchanges and other service providers.
Indeed, as can be seen above, similar gas price spikes have occurred in volatility over the past few months.
You can see the price of ETH here.
Disclaimer: This is not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
Minh Anh
Bitcoin Magazine
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