Ethereum price may be affected by the overall downturn in altcoins right now, as the market flashes red once again. The asset already slid from its recent highs above $270, and may push back to the $200 range.
Ethereum Price Turns Down Sharply, Further Correction Possible
For a brief stint, ETH became one of the most active assets, and also the basis for rallies in smaller altcoins. ETH is the second most liquid asset after BTC, and saw a significant rise in trading activity in the first months of 2020.
But after weeks of rallying, Ethereum price also shows signs of fatigue. Predictions now envision a temporary dip across the board, with ETH not being an exception.
Similar idea on the USD pairing.
I'm not long-term bearish on crypto by any means but a few weeks of pullbacks/consolidation wouldn't be a bad thing. pic.twitter.com/1jWxjOkLFk
— Loma (@LomahCrypto) February 27, 2020
On Thursday, ETH stabilized around $227.86, after a rapid slide at the start of the new week. ETH looks like entering the downward leg of its second rally in the past 12 months, where prices got near $300, and appreciated against BTC. ETH trading volumes peaked above $28 billion in 24 hours, after lagging for months.
Altcoins remain extremely volatile, losing more than 20% and more after their recent rally. Ethereum price for now has lost only 11% on a weekly basis, but has followed the overall trend.
Still Among Most Liquid Crypto Assets
While the overall sentiment has worsened, ETH may get a possible boost from an increase in USDT tokens minted on the Ethereum network. In a single transaction, the network absorbed another 300 million USDT. The stablecoins also boost ETH trading directly, and feed into the DeFi ecosystem and exchanges. More than 66% of all ETH trades happen against USDT, boosting its decoupling from BTC.
ETH gained prominence in late 2019, as its ICO use case was replaced by various forms of decentralized finance schemes and crypto-collateralized lending. The latest price slide has not caused messages of liquidations in the DeFi space.
@AaveAave not so subtly climbing the rankings, now at #7 https://t.co/zqMQAHgdAG #DeFi pic.twitter.com/fC5KYFxtuB
— DeFi Pulse (@defipulse) February 26, 2020
Despite the growth of crypto lending, in the short term, ETH may still be affected and slide to a lower valuation. ETH also crashed in BTC terms, so a recovery of the leading coin will not translate into gains. At current prices, Ethereum price may find support at $220, and move in a range, with resistance around $235. The sudden downturn worsened the sentiment surrounding ETH, losing the expectations for a hike to above $300.
The Ethereum network also shows heightened activity, with more than 700,000 transactions per day. Gas prices remain within the normal range, with Tether as the most used smart contract.
What do you think about the price direction of ETH? Share your thoughts in the comments section below!
Images via Shutterstock, Twitter @Lomacrypto @defipulse