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Ethereum (ETH) fell below $3,000 for the first time in 50 days, causing a shockwave among crypto investors. This drop raises questions about the future of the market.
A drop marked by massive liquidations
The decline of Ethereum to $2,871 is part of a broader correction in the crypto market. On July 5, the total market capitalization of cryptocurrencies fell below $2 trillion, a level unseen since February. This widespread decline also affected Bitcoin (BTC), which fell to $54,953.
The reasons for this drop are multiple. The bankruptcy of Mt. Gox transferred 47,229 bitcoins, worth $2.6 billion, to a new address, increasing selling pressure on the market.
Additionally, the German government has transferred 7,583 BTC to exchanges since June 19, further adding to this pressure with a total value of $415 million.
These movements have led to massive liquidations of long positions, including $235 million in Ethereum futures contracts.
This increased selling context has therefore exacerbated the market correction, raising fears of the end of the recent cryptocurrency bull run.
Volatility: a double-edged sword
Volatility is an inherent characteristic of the crypto market. While it can offer significant gain opportunities, it also carries major risks. Traders who were hoping for stability post-ETF launches are facing a very different reality.
The famous economist and crypto-skeptic Peter Schiff recently predicted a drop of Ethereum to $1,500. This forecast, although pessimistic, reflects growing concerns within the crypto community.
Schiff points out that Ethereum is going through critical support levels, and the recent drop below $3,000 seems to prove him right.
However, not everything is bleak. Franklin Templeton, a global asset manager, published an optimistic report on Ethereum, highlighting its technological advancements and economic potential.
This perspective contrasts sharply with Schiff’s predictions, illustrating the duality of opinions surrounding Ethereum.
Perspectives and resilience of the ETH crypto
Despite the recent correction, Ethereum derivative indicators show relative resilience.
Monthly futures contracts are trading at a premium, although this has fallen from 11% to 8% recently. This relative stability suggests that professional traders are not preparing for significant further declines.
Moreover, the upcoming launch of an Ethereum spot ETF in the United States could offer a positive dynamic. The approval of this ETF could attract new institutional investors, thereby strengthening Ethereum’s position in the market.
It is important to note that, although short-term predictions are uncertain, Ethereum and its crypto continue to play a central role in the decentralized economy. Its capabilities as a platform for decentralized applications (dApps) and smart contracts remain unmatched, offering long-term growth prospects.
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Fasciné par le bitcoin depuis 2017, Evariste n’a cessé de se documenter sur le sujet. Si son premier intérêt s’est porté sur le trading, il essaie désormais activement d’appréhender toutes les avancées centrées sur les cryptomonnaies. En tant que rédacteur, il aspire à fournir en permanence un travail de haute qualité qui reflète l’état du secteur dans son ensemble.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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