A clumsy technical setup and a declining number of Ether hit the price down.
Ether had an annual supply rate of $1, 183 usually, but now the tables have turned as it has steeped below zero, the first occurrence after Ethereum was transferred to proof-of-stake in September. The issue has raised concern which was followed by tens of thousands of questions that asked, why Ethereum has dropped its price. The answer is nothing but a mere cryptocurrency market crash.
ETH Price Is Expected To Drop By -10.09% In The Next 5 Days According To Ethereum Price Prediction
Whatsmore, currently Ether tokens are being burned rather than created and these are said to be a part of Ethereum’s fee-burning mechanism. In other words, the higher the on-chain transactions are the more ETH transaction fee gets burned. Ever since the devastating mechanism was introduced in August 2021, the Ethereum network has burned at least 2.72 million ETH, which is equal to destroying roughly 4 ETH per minute.
In a 30-day time frame, the Ethereum network has been purportedly burning ETH at an annual rate of 773,000 tokens, whereas the annual rate of issuance is said to be 603,000 tokens. Simply put, ETH’s supply is going down every year by 0. 14%. Indeed, the cryptocurrency is further expected to drop in value in the coming days.
Since traders were rushing to transfer their ETH from and to exchanges, Etherium’s transaction fees skyrocketed in May 2022. It was amid the dramatic disintegration of FTX. Glassnide released that by far, nearly 1 million Ethereum has left exchanges this month. However, many analysts see deflationary prospects of Ether as a stupid signal, which will eventually boost its overall scarcity and that may also hurt its recovery process in its entirety.
Ether’s price dropped nearly 20%, which is not a small altercation and has been trading around $1,250. Moreover, Ether’s price has reached a point, where it has entered a stage of breakdown of its ongoing symmetrical triangle pattern, which has the potential to lower the price by another 50% from the current situation.
A symmetrical triangle is nothing but a continuation pattern, which means they pursue its previous trend when the price breaks out of its original range. When Ether’s symmetrical triangular theory is applied, it will probably be down about 50% from current prices.
|$ 1,068.61 (-10.09%)
|Fear & Greed index
|24 (Extreme Fear)
|Key support levels
|$ 1,197.27, $ 1,170.74, $ 1,132.12
|Key resistance levels
|$ 1,262.42, $ 1,301.05, $ 1,327.58
Most of the surly arguments were rooted in Ethereum’s richest investors. Notably, the duration of Ether’s latest downtrend has clashed with the drop in Ether supply with a balance between 1 million and 10 million ETH.
Interestingly, the addresses with a balance that lies somewhat between 1,000 ETH and 10,000 ETH have risen at the time of the immensely popular price decline. This could probably hint at two things. First up, teh addresses with 10,000 or more ETH tokens, reduced their current holdings and thus eventually got placed in the smaller cohorts and these cohorts may simply exchange wallets that have witnessed massive ETH outflow during the FTX fiasco.
Second, the 10,000 ETH cohort saw the price decline as a “buy the dip” opportunity” which subsequently boosted its control over Ether’s November supply.
With more than a thousand cryptocurrencies out there, Ethereum has been different, rising to the top of the pile, making a seat next to Bitcoin. Even though its value can in no way come nearer to the flagship cryptocurrency, some still consider it will be beneficial for trading. They even believe such currencies will have greater potential in the long run.
In reality, Ethereum functions as a cryptocurrency much like most of the other prevailing ones, and its token Ether works in a similar way as that of Bitcoin. One can buy and sell it but with corroboration for transactions handled over the blockchain.
Now, it’s entirely decentralized, with nearly no bank to provide the proof needed to validate them. However, its broad strokes are still similar to Bitcoin as well as some other cryptocurrencies. This means, the person who owns the coin can actually use it for conducting online transactions or can also save it and earn a potential sum from its growing value. Apparently, it grew from around $10 per Ether at the beginning of 2017 to more than $1,100 in the next.
Although both Ethereum and Bitcoin have several similarities, they both share different goals, and that makes them different from each other.