Ether Drops Below $1,400, Pummeled By US Inflation And Difficulty Bomb Setback


Ether fell to its lowest level in more than a year as altcoins took a bigger hit. The second largest cryptocurrency by market capitalization recently traded around $1,450, down more than 15 percent since the weekend.

At the time of writing, Ethereum is trading at $1,327.40, down 26.5 percent from the previous week. Coingecko stats released on Monday show that ETH lost over $200 in the last 24 hours and over $500 in the last week.

Ether market capitalization loses $38 billion in three days

For most of the past 30 days, the price of ether has been hovering around $1800. The second part of the week has been miserable for Ethereum, as its market capitalization has fallen by nearly $38 billion in the past three days.

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The total market capitalization of cryptocurrencies has been trading in a downtrend over the past month and is currently supported at $1.17 trillion.

The cryptocurrency market lost more than $100 billion over the weekend after Treasury Secretary Janet Yellen presented a bleak outlook for cryptocurrency.

On Friday, cryptocurrency prices fell along with the S&P 500 and Nasdaq, both of which fell by 2.9% and 3.5%, respectively. Next week’s two-day Federal Reserve meeting is expected to trigger additional rate hikes.

Cryptocurrency losses mirrored those of stock markets, which fell on Friday after the latest consumer price index rose to an annual 8.6 percent, the highest level in more than 40 years, that showed the price rally will continue for some time.

ETH total market cap at $161 billion on the daily chart | Source: TradingView.com

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Pulls the “Difficulty Bomb” to the bottom of ETH

The announcement that core developers were delaying the implementation of the so-called “difficulty bomb” led to a further decline of about 8.0 percent in Ethereum on Saturday, after a drop of nearly 7.0 percent on Friday.

Despite this week’s successful publication of the merger on the Ropsten Testnet, the Ethereum developers chose to delay the bombshell.

Ethereum’s difficulty bomb is a unique piece of code that makes it more difficult for miners to validate transactions on the blockchain and earn a reward via a Proof of Work consensus mechanism.

It is integrated into Ethereum in order to gradually eliminate on-chain mining as it transitions to PoS.

According to technical indicators, Ethereum price is showing a descending triangle pattern, which could lead to a drop in the near term to $1,200.

Featured image from Chemistry World, chart from TradingView.com



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