In the past few weeks, the crypto market had seen strong price increases. Now the tide seems to be turning. Since yesterday, Ethereum (ETH) has lost more than 5 percent of its value. Just a profit taking or an expression of an overheated market?
Since July 20, the ETH price has risen by 94.4 percent. It was the biggest rally in Ethereum since the massive price gains in the spring. But since the end of the first week of August, the air seems to be more and more out of Ethereum.
Why investors are selling Ethereum
At $ 3,366, the ETH price was at its highest level since mid-May at the beginning of this week. At that point in time, however, a real price increase could only be talked about. Previously, the ETH course had been largely on the spot for more than two weeks. While other coins were still able to gain in value, Ethereum struggled most of the time to defend the brands it had already reached.
With Ethereum, the current price loss is by no means the only one of its kind in the past few weeks. On August 8th, 12th and 17th the course had already slumped with a comparable intensity, only to recover afterwards.
At least in the short term, there doesn’t seem to be any evidence that the current drop is being caused by major panic selling. Of course, if the price should continue to fall in the next day or two, Ethereum could develop its own momentum in view of the somewhat tense market situation.
Is the NFT market overheating?
NFTs (non-fungible tokens) are enjoying enormous popularity all year round. For the unique digital art, moon prices have been called for months, depending on the type. The most important network for trading NFTs is the Ethereum blockchain.
Even here, however, experts are already seeing signs of overheating. Should the market cool down noticeably in the coming months, the resulting pull could also pull various crypto currencies with it. In this case, ETH in particular would be acutely at risk.
Should investors considering buying Ethereum keep their hands off it? Nobody will be able to answer this exactly at this point in time. What is certain, however, is that Ethereum is currently lacking further buy signals. As long as the market does not receive any new impetus, the ETH rate currently appears to be in a precarious balance.
Open a free crypto broker account? Trade real cryptocurrencies quickly and securely with eToro *.