It has been a terrible couple of weeks for Ethereum and its traders as the prices have been struggling to make any kind of headway and continue to fall as of this writing and so far, there does not seem to be anything to stop it from falling further. The reasons for the fall is not something that happened today or yesterday but we have to trace it to events that took place 2 weeks back. Since the industry is new and small, it is easier for us to trace and connect events.
Couple of weeks back, ethereum prices crashed overnight as they fell to $13 from its highs of around $300. This came at a time when the Ethereum market was growing and posing a strong challenge to the bitcoin industry. This dented the confidence of the traders and the investors massively. Though the reason attributed to it was a technical glitch caused by an ICO and the prices did recover, the traders and the investors do not care when it comes to their funds, and rightly so. By the events since then, we can see that the investors have not regained the confidence even now.
Then there was the news that the founder of Ethereum had died in an accident and this brought in further panic into the markets and among traders. The signs of an imminent crash were all there. Panic, risks and uncertainty are all that’s needed for a crash to begin. Technically as well, the signs were there as the daily ranges got tighter and tighter as the investors and traders were reluctant to buy and the bulls were trying to hold on for dear life. But, once the prices moved below the lows of the range, the end game was near and we have been seeing the prices moving lower ever since. The move has not been one of panic, which usually leads to a quick and sharp move. But it has been a calculated selling as evidenced by the slow but sure move down for the prices. That’s what makes this move more decisive and dangerous as well as the prices crash through $200.
What’s Next for Ethereum?
So, what does the future hold for Ethereum and is this the end of the road? Not necessarily. The cryptocurrency is a new and volatile market and for such developing markets, such developments, shocks and crashes are normal. In fact, it is events like these that make the markets stronger and robust and we believe that it will be the same case. Of course, the panic might spread to the other ctyptocurrencies and this could cascade even more but all this would be a part of development of the market, which in the long term, is a good sign.
Technically, the next support comes in only around the $100 region but that is still very far just as yet and a move there would negate all the gains made since the beginning of the year. We believe that the prices would find some support around the $175 region and that might be a good place to build longs. Of course, make sure to keep stop losses in such a tight market as the next support comes in way below at $125. As said earlier, this is a developing market and there is still a long way to go.