Ethereum (ETH) began to recover yesterday, after tumbling almost 35%. The market cap now stands at US$53.31 billion, on exchange-traded volume of US$1.Five billion ter the past 24 hours. The ETH/BTC and ETH/LTC ratios have also dropped sharply, signaling a narrow selloff ter ETH alone.
The 500-pound gorilla ter the slagroom is if and when projects presently holding millions ter ETH from Initial Coin Offerings (ICOs) will sell their treasury or will proceed to hold through the drawdown. This selling pressure will proceed to build if ETH price moves lower spil more and more ICOs will proceed to succesnummer their violating point or capitulate on some or all of their holdings. Some projects have also invested their holdings into other ICOs, creating a risk pool reminiscent of the credit default interchange ruina which brought down total financial markets ter 2008.
According to CoinSchedule, there have bot 88 ICOs this year, raising a total of Three.38 billion ter less than three months. The largest raise this year, US$850 million, wasgoed the very first round of the Telegram ICO. Ter , 210 ICOs raised a total of US$Trio.88 billion.
Block.One’s EOS is one of the largest holders of ETH, with 445,000ETH, and proceeds to collect funds for their ICO. On March 17th, around Ten:40PM EST, overheen 50,000ETH moved from the EOS wallet to a Bitfinex exchange. The ETH emerges to have bot sold the following day.
Furthermore, EOS is rechtstreeks competition with Ethereum, and a self-proclaimed ETH killer. By holding large amounts of ETH, the EOS team can lean on the ETH price when it is advantageous to do so. EOS wasgoed also recently covered te a segment by late-night satirist John Oliver, which among other things highlighted troubling allegations against Brock Pierce.
The EOS team responded te an open letterteken, entitled “Dear John Oliver” and eliminated Brock Pierce spil an advisor, telling “we recently came to a mutual agreement that Brock would end his role at block.one spil he transitions to independent community building and investment activities.”
The explosion ter ICOs overheen the past 12 months proceeds to draw the attention of the United States government. According to the Wall St. Journal, the Securities and Exchange Commission has issued “dozens” of subpoenas and information requests to technology companies and ICO advisers. Voorzitter Donald Trump recently signed an executive order today barring US citizens from transacting te Venezuela’s Petro sale. The Petro tokens proceed to remain on a single NEM address.
On the network side, transactions vanaf day and transaction fees are presently mirroring levels last seen ter the beginning of December, signaling a slowdown ter network use. A decrease ter speculation, dApp usage, and ICO issuance may be responsible for this decline.
ETH’s rising Network Value to Transactions (NVT) ratio is moving ter response to a slowdown ter network transactions. A low or falling NVT suggests the asset may be undervalued. A rising NVT ratio suggests that the asset may be overvalued. The ratio broke out of a taut range formed earlier ter the year. BTC, LTC, and ETC all carry NVT’s half that of ETH, while DOGE carries the lowest NVT of all.
Hash rate and difficulty proceed posting fresh record highs, despite the hard fork ter October decreasing the block prize from 5ETH to 3ETH. Mining profitability is presently down overheen 70% from peaks established ter both June and January . Both of thesis time periods were marked by record price levels and transaction fees. Spil difficulty rises and transactions remain unchanged or decrease, mining profitability will proceed to decrease.
Exchange traded volume is led by the Bitcoin (BTC), U.S. Dollar (USD), and Tether (USDT) pairs. The majority of trading has bot conducted on OKEX, Binance, Bitfinex, and GDAX. The Korean Won (KRW) trading pair holds a premium of Four.3%. The decentralized exchanges IDEX and Fork.Delta facilitated the highest volume overheen the past week amongst their peers.
The Overheen The Tegenstoot (OTC) exchange LocalEthereum averaged less than
200ETH vanaf day te transaction volume overheen the past week, according to dappradar. Te comparison, LocalBitcoins averaged 7,696BTC worldwide te the past week, according to coin.dance. Traditional OTC desks often require a ondergrens order of inbetween US$100,000 and US$250,000, whereas thesis peer-to-peer marketplaces have no ondergrens order size.
ETH has undergone sustained bearish momentum overheen the past week. The status of the current trend can be determined using Ichimoku Cloud, Moving Averages, Support Zones, and Chart Patterns. Further background information on the technical analysis discussed below can be found here.
The Ichimoku Cloud metrics on the weekly chart, with singled settings (Ten/30/60/30) for quicker signals, remain bullish, albeit price has fallen far below the Kijun. A long uitgang signal, the bearish TK cross, is likely going to occur te the coming weeks. Price is now ter a no-mans land based on the Cloud te this timeframe, albeit it did find support on the 50EMA. Look for a weekly dragonfly candle close for a potential bullish reversal, and retrace back to the Kijun around US$800.
The Ichimoku Cloud metrics on the daily chart, also with singled settings, are entirely bearish. The Tenkan (T) and Kinjun (K) lines are now bearish, having recrossed on March 7th after failing to reach the Kumo twist. This bearish cross below the Cloud typically signals bearish continuation, which te this case proved true.
Price found support on a previous consolidation zone and closed spil a dragonfly, a potential bullish reversal, even more likely with a green daily close today. Resistance targets include the 200EMA at US$650 and the Kijun at US$720. There is also another potential bearish continuation signal, the 50/200EMA death cross, which would be the very first since November .
The Ichimoku Cloud metrics on the daily chart, with doubled settings (20/60/120/30) for more accurate signals, is also entirely bearish. The distance of Price from the Kijun (crimson) suggests that Price is intensely oversold. Price will likely budge to the mean, Kijun, at US$850 before moving lower. A Kumo twist on April 12th gives an chance for a bullish reversal above Cloud, should momentum exist to thrust price through the resistanceless zone.
On the four hour chart, a bullish three drives chart pattern may have finished. This occurs when three consecutive moves of the harshly same size occur, followed by a reversal. The target for completion of this pattern is 50% of the entire budge, or around US$660. A peak ter volume on the selloff is also very suggestive of capitulation and bearish exhaustion.
Lastly, ETH/BTC on the twelve hour chart has fallen far below the 200EMA and ended a bearish head and shoulders pattern, both indicating strong bearish momentum. The measured budge, 1.618 Fibonacci extension, and monthly pivot all point to 0.050BTC, a strong psychological support level. On lower timeframes, the formation of a bear pennant further suggests extra downside.
Fundamentals suggest slowing network utility, with an increase te governmental scrutiny following some gigantic ICO funding rounds. Collectively, ICOs represent an enlargened risk cargo on the ETH network by holding large amounts of ETH and using that to potentially invest ter other ICOs or startups. Based on available blockchain gegevens, most of the ICOs have continued to hold through the pullback from all time highs.
Technicals are bearish yet optimistic. The technical indicators point to a strong bounce back to the mean around US$850, based on the current oversold market conditions. Price has an chance to roll bullish around April 12th, should momentum exist. ETH/BTC remains strenuously bearish with targets inbetween 0.040BTC and 0.050BTC.