The last 24 hours in the Ethereum price have been for pro traders, and for those who have been following the community from the start. Having been public for a little over a year, Ethereum’s price has enjoyed a steep upwards trend in recent months which has led many people to believe that the path to price parity with Bitcoin is eminent. At the time of writing, Ethereum’s price has dropped below $200, and the market capitalisation has had a tremendous decline, dropping by around $750 million. However, as the Ethereum price has continued to rise, the expectations from traders have increased dramatically.
The second most popular digital currency, Ethereum, has just slipped into the red for the first time in three days, following the announcement of the delay of the Constantinople hard fork. Although Ethereum’s price has been relatively stable in the last few days, the price of Ethereum’s rival, Bitcoin, has plunged from its highs above $7,000 to below $6,000. Ethereum is currently trading at $6,635.00 (according to coinmarketcap.com)
I expect the price of Ethereum to keep falling. Here’s why.. Read more about eth news today and let us know what you think.Derivatives data shows that traders in Ether (ETH) are less optimistic than traders in Bitcoin (BTC). Although Altcoin is up nearly 200% in the first half of 2021, compared to Bitcoin’s modest 22% price increase, traders seem to be more bothered by Ether’s recent lag.
Institutional flows also confirm the drop in optimism we are seeing in Ether derivatives, as ETH mutual funds saw record outflows last week, while Bitcoin flows are starting to stabilize. According to CoinShares, Ether funds saw record outflows of $50 million last week.
December premium of OKEx BTC futures (blue) vs ETH (orange). Source: TradingView
The chart above shows that the premium for December bitcoin futures has increased to 3.5%, while ethereum contracts have not followed this trend. Although both assets posted a neutral-bear indicator, there are signs that altcoin investors are less optimistic about the near-term recovery.
Related: The leading bitcoin price indicator is giving the fifth buy signal in BTC history.
Another downward move will hurt altcoins even more
Another proposition that could negatively impact Ether’s premium is the potentially negative 30% impact of Bitcoin’s performance. Philbfilb, an independent market analyst and co-founder of the trading suite Decentrader, said a 30 percent drop in bitcoin could lead to a two-fold drop in altcoins.
Clem Chambers, managing director of financial analytics site ADVFN, also predicted another possible downward move that would replicate the cryptocurrency winter period of late 2018. Chambers says bitcoin could capitulate and fall back to $20,000.
While overall market sentiment is neutral-absolute, it seems reasonable to expect a more challenging scenario for Ether, including the uncertainty associated with the move to Proof-of-Stake (POS).
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Cointelegraph. Every investment and every stage of trading involves risk. You should do your own research before making a decision.
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