The Reason for the Recent Price Plunge of Bitcoin (BTC) and Ethereum (ETH)

Ethereum Frozen

Over the past couple of hours, the crypto market has been on a downward trend and most digital currencies have lost a considerable fraction of their values. The recent declines have wiped off $9 billion from the valuation of the entire crypto market. Even Bitcoin (BTC) and Ethereum (ETH) has lost more than 14% of their values to the recent price plunge in the market.

Bitcoin (BTC) is now trading below the $3,700 mark, bringing it back to its levels last week after a promising corrective run on the 6th of January when the value of Bitcoin (BTC) surged to $4,104 from $3,753.

Bitcoin (BTC) and Ethereum (ETH) Amongst the Highest Losers over the Past Day

Over the past couple of weeks, the value of Ethereum (ETH) has increased significantly. The digital currency has seen an increase that almost doubled its value from $85 to about $165. The massive surge in the value of the digital currency also resulted in an increase in its market cap. The market cap of Ethereum (ETH) saw a massive boost that helped it to overtake XRP (XRP) has the second largest digital currency by market cap.

The sharp increase in the value of Ethereum (ETH) was attributed to the forthcoming launch of Constantinople – the hard fork of Ethereum, which is scheduled to launch between Jan. 14th to 18th. The trading volume of the digital currency also increased significantly.

Nevertheless, huge near-term gains usually leave digital currencies vulnerable to large near-term corrections and over the past couple of hours, the value of Ethereum has plunged deeply. Ethereum (ETH) has lost about 15 percent of its value over the past few hours, declining from $154 to about $128 at the time of writing. This is the largest single-day drop of the digital currency in the past twelve months.

As the bears started a selloff and as sell pressure on the digital currency market intensified, digital currencies that saw nice gains in Dec. and Jan. such as Litecoin (LTC), Bitcoin Cash (BCH), and Ethereum (ETH) experienced the largest declines on the day. On the 7th of this month, traders including “The Crypto Dog” said that the technical indicators of Ethereum signal a near-term downward trend.

On Monday, the trader said, “Maybe I am just seeing what I want to see, but this chart is screaming to me ‘last chance to short Ethereum.’ It makes sense to see some bounce here, given this level on the ratio, so I hesitated to say this is a great entry. …and of course, I am just thinking out loud, not trying to urge anyone to FOMO into a trade. I shorted Ethereum at $156 and sitting relatively comfy here.”

In December, Mark Dow – a trader that shorted BTC from its peak at about $20k until it declined to $3,500, said that if the value of Bitcoin (BTC) fails to surge over the $6k mark in the near-term, the crypto market is in trouble.

Bitcoin (BTC) has also lost a significant fraction of its value over the past few hours. The digital currency is now trading at the $3,600 level after a decrease of about 5 percent over the past twenty-four hours.

Ethereum (ETH) Price Today – ETH / USD

Name Price24H (%)
Ethereum (ETH)
$249.98
6.64%

At the time of writing, Ethereum (ETH) is changing hand at $127 after losing more than 7 percent of its value over the past twenty-four hours. The current market cap of the digital currency is $13.29 billion and its trading volume over the past twenty-four hours is $2.56 billion.

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