The deteriorating state of the cryptocurrency market is leaked through Ethereum. The market value of Ethereum was dumped by more than $100 billion in the last month.
Ethereum was trading at $1,809.49, down -6.9% Wednesday, the chart by Coingecko shows.
The bearish market position is becoming more consistent as Ethereum appears to be resting in its comfort zone and trading below $4,000 this year.
Being the second best cryptocurrency, Ethereum remains unavailable, while maintaining its position as the second largest cryptocurrency by market capitalization. ETH closed in May with a market capitalization of over $235 billion.
The price action revealed a staggering 31% drop compared to its market value on the opening day. May 1 gave ETH a hint of hope when its trading volume crossed $15.33 billion with a massive market capitalization of $341.05 billion.
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Ethereum price is in a downtrend
Investor confidence waned in 2022, which led to a massive sell-off of crypto assets. The panic from May 9 to 13 was exacerbated by the drop in the market capitalization of Ethereum.
Negative market sentiment was caused by the deteriorating economic situation, inflation, Russia’s invasion of Ukraine, and an increase in interest rates.
ETH transactions in May reached over 16,950 at a price of $1,947. This was followed by a massive transaction of 12.25 million ETH, or roughly $23.86 billion.
ETH opened with a price movement of $2,072 and the intraday low was at $1,748. The trading volume recorded 42.46 billion dollars, which indicates a market capitalization of 236.88 billion dollars.
ETH total market cap at $218 billion on the daily chart | Source: TradingView.com
The numbers show a 30% drop in market capitalization on the opening day of ETH. Experts say that the lowest point in ETH could extend into July 2021.
What caused the price of ETH to drop?
Ether has been down for the past few weeks. The following are the factors that can be attributed to the low price:
- Ethereum is preparing for to merge Upgrade, as you will switch from PoW to PoS. However, the developers see a security risk upon its release. Its POS chain can share a file reorg The problem that the POS chain can split two transactions into two copies as well.
- Ethereum also suffered a drop in user activity and demand, which could exacerbate its bearish move.
- Lower interest on NFT and profitability of DeFi led to lower trading volumes.
Ethereum supporters are still devouring this digital asset even though the market continues to fall.
ETH opened on May 1 with a trade value of $2,730, which moved to a monthly high of $2,957 on May 5. It was tested on May 27 at a monthly low of $1.721, and then closed the month of May at $1,942.
The values at the end show a decrease of 28% when comparing the values from the opening to the closing price of Ethereum in May.
Featured image from Daily Express, chart from TradingView.com