Market Overview

Ethereum's High, High Hopes May Be Shattering Down To $11

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The future looks grim for Ethereum, and prices for it are back in double-digit territory, setting a new low that it hasn’t seen since early 2017. Let's take a fundamental and technical look at what once had high high hopes.

Ethereum entered the year with high hopes, after being used as the launchpad for the majority of initial coin offerings. Although initially proposed as a “World Computer,” the Ethereum network simply hasn’t been able to handle the transaction volume that users are throwing at it. Even simple programs, like Crypto Kitties, have caused skyrocketing transaction fees, making Ethereum impractical for all but the simplest decentralized applications. That doesn’t mean the end of Ethereum, and developers are working on ways to make Ethereum faster and greener.

Programmers are hoping to change Ethereum’s consensus algorithm from mining, which uses a lot of energy, to a more efficient staking system. In addition, they’ve also proposed solutions like sharding, which would allow the blockchain to handle more transactions in a shorter time.

Now for Ethereum traders out there, let’s take a look at its price action on the daily chart. Wednesday’s 8 percent drop brought the ETH/USD pair one step closer to a key support level at $80, which is where Ethereum’s price was at back in May 2017. A drop below this level could open doors for further drops towards the lows of March 2017 at around $11.

Now you may be asking, is this the death of Ethereum? Personally, I doubt it. Its survival ultimately depends on the fundamentals and how fast the network’s technology can improve to stay on top of the competition. On the bright side, if either of the support levels I mentioned is strong enough to hold the price from dropping lower, we could expect the next bullish momentum to start just right there.

Related Links:

Bitcoin Hits New Lows, SEC Delays ETF Ruling

Ripple Takes Ethereum's Place As The No. 2 Crypto, But Could Drop Again Soon

The preceding article is from one of our external contributors. It does not represent the opinion of Benzinga and has not been edited.

Posted-In: contributor contributors ETH EthereumCryptocurrency Markets

 

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