The price of ETH started falling along with other cryptocurrencies in the beginning of the year. When it fell as low as $300, investors believed it had reached bottom. This week, changed the definition of bottom as the third largest cryptocurrency per market capitalization is now struggling to stay within three figures as the price reaches a $126 low. Right now, analysts are afraid that the price of ETH might fall below $100 and even as low as it was early in 2017.
What Hope Is There For ETH?
Currently, ETH is 91% down from its all time high. It has reached an 18-month low. The most recent sell-off in the market may have been caused by the SEC’s ruling against two players in the initial coin offering world. About two weeks ago, Zachary Coburn, the founder of EtherDelta was charged for operating an unregistered securities exchange. While some people believe this may be part of the reasons why there is a major sell-off, it’s not a strong enough catalyst to cause such a major dump of almost 40% within seven days.
Bitcoin (BTC) Price Today – BTC / USD
According to the research by The Block, ICO treasuries hold more than 3.57 million ether tokens. This is about 3.5% of the total ETH is circulation. Companies that raised funds in ETH during ICOs still have a fair portion of the token in their possession. If the SEC continues to take action against ICOs, these companies may be forced to reimburse ETH in USD and this would require that they liquidate their ETH reserves.
In April this year, the initial coin offerings treasuries had about 4.65 million ETH in their store. This made up for about 4.5% of the total ETH in supply. Between then and now, they have already liquidated over 23% of the ETH in their possession. A research conducted showed that ICO reserves had more than $1.76 billion in storage. Now, the number has dropped to $475 million.
In total, ICO projects have liquidated more than 64% of the funds they raised initially. This marked the major sell-off in the market that took the price of ETH to disappointing lows. Within the last two months about 2% of the ETH in population was sold-off. This shows that while ICO projects may have contributed to the drop in price, they aren’t the only things responsible. Considering the current situation in the market, it’s unlikely that ICOs will continue selling at this time except they have no other choice.
While the fall in the price of ETH is disturbing, another disturbing fact is that many of the ICOs that were hosted on the Ethereum blockchain have not started generating profit. To cover their expenses, they may need to sell ether. This is only going to make things worse for ETH.
Ethereum (ETH) Price Analysis
At the time of writing, Ethereum was trading at $136.15. It was struggling to recover against the USD as it was higher by 3.18%. Against Bitcoin, it was up by 1.27%. The trading volume over a 24 hour period is $2,493,645,502 and the market capitalization has fallen as low as $14,071,234,132.