Over the last 6 months or so, ETH has been on a bearish market, dropping from the peak of $800 to below $200 in a matter of months. This unfortunate turn of events has left many traders and analysts wondering where Ethereum’s true bottom lies. However, the crypto has improved its stand over the last few days to attain a value lingering just under $230.
Why The Slump?
First off, it’s good to understand that in the crypto world, an influx of tokens released into the market might upset the market value of the particular cryptocurrency unfavorably. In the case of Ethereum (ETH), the price dip was largely as a result of big ICOs dumping their ETH holdings into the market to fund their business ventures.
The most impacting event occurred in May when 100,000 ETH worth $60 million (each valued $600 at the time) were dumped into the market, causing a sharp 15% price dip within weeks. By August, ETH’s value had thinned out to just $300, and another flood of 110,000 ETH in mid-August brought about another bearish sentiment that led to a further price dip.
The second reason for Ethereum’s price woes stems from the network’s troubles in controlling its ecology and tweaking up its upgrades to perfection. For instance, the network has been experiencing slow processing speeds for LongHash data, causing a workload of unconfirmed transactions totaling 80,000. That’s not a good thing for a cryptocurrency that sits at the top of the chart as the second largest and most popular in the market.
What Could Happen?
Besides these issues, ETH has faced stiff competition from the likes of EOS that has 4 Dapps as opposed to Ethereum that has only 2. ETH has experienced a few spikes and falls in the last few months, with each price spike followed by a sharp decline. That dynamic suggests that if the cryptocurrency can’t establish a stable resistance level soon, things might not work out so well for its market value as it would keep going down.
However, as much as there could be many market dynamics that could trigger a bearish move for ETH, it’s estimated that the crypto’s value wouldn’t fall below $140 before it bumps up again. That’s because that’s the value at which miners would break even, and anything below that price wouldn’t be worth it.
Interestingly, if the value were to drop below $140 and make it unprofitable for miners, the mining would stop, and the supply of ETH tokens would reduce. That would create more demand for Ethereum and ultimately cause a bullish run. That means that even if ETH had to down, it wouldn’t really die. A bear market might as well be the invite for a bull run.