Over the past day, the price of Ether has decreased by 17%, thus falling below $ 2,000. Bitcoin has fallen in price by 15% and is again trading at $ 35,000 – $ 38,000.
Many altcoins are falling even faster. So, Binance Coin (BNB) fell 56% over the week and dropped from the third line in the list of the largest cryptoassets to sixth, behind Tether, Dogecoin and Cardano. The latter two lost 39% and 46%, respectively, in the same segment.
Against the backdrop of such movements, the total capitalization of the cryptocurrency market turned out to be below $ 1.5 trillion, having decreased by 9% in the last 24 hours and 35% in a week. The maximum capitalization was set at the beginning of the month at about $ 2.5 trillion.
The impetus for the sale was the announcement of the largest service provider for crypto investors in China, the Huobi crypto exchange. It announced the curtailment and suspension of some of its services and products, including hosting and supply of mining equipment. The Chinese authorities last week announced new restrictions on cryptocurrency transactions.
Ethereum inflow to exchanges
Some analysts foresaw such a sharp drop in ETH after massive digital currency inflows hit exchanges, signaling that whales were gearing up to sell.
Shortly before the sharp decline, the exchanges received 199,947 ETH ($ 445 million). It was the largest inflow since the beginning of this year.
ETH is currently trading 54% below its all-time high, which it set 11 days ago at $ 4,362. Ether has also lost almost 30% when it peaked on May 15. The founder of Capriole Investments, Charles Edwards, says that in the past, the market has repeatedly peaked when investors became convinced of the obsolescence of Bitcoin and prophesied flipping, that is, the emergence of another cryptocurrency, in particular, Ether.
At the same time, the Santiment analytical platform reports that the number of whale-level Ethereum transactions (by $ 100,000 and more) this week soared to levels that the market has not seen since January 2018. When the price of the cryptocurrency peaked during the previous bull cycle.
For the further growth of digital coins, new incentives are needed in the form of positive news. Negative news, on the contrary, will reduce quotes, analysts say.
In addition, according to them, it is still impossible to say unequivocally that the recovery of the crypto market has begun. Since a new decline or a large-scale correction may occur.
One of the negative impulses, according to analysts, may be a possible investigation by the Securities and Exchange Commission (SEC) in relation to the CEO of Tesla and SpaceX Elon Musk on suspicion of manipulating the crypto market. This can lead to a drop in the rate of many coins.
Ether will return to growth
Optimism around Ethereum remains high as investors and users await the highly anticipated EIP-1559 update. The update will change the structure of Ethereum fees and will remove the uncertainty about the cost of gas.
Therefore, most likely tomorrow Ether will return to growth, which means that the yield will go up.