One of the analysts believed that markets priced in Ethereum’s EIP upgrade earlier this year is about to happen. Ether (ETH, -2.28%) and other alternative cryptocurrencies, commonly known as altcoins in the world. These Altcoins are getting the hit alongside bitcoin (BTC, -3.5%). However the tough overall mood eclipses bullish individual narratives.
Ethereum’s Price and its Blockchain
The native token of Ethereum’s blockchain is trading near $1,758 at the time of this report. It fell 6% on a 24-hour basis. The cryptocurrency reached a three-week low of $1,721 early today. It was having a peak above $4,000 in May. Other promising altcoins like XRP (-5.11%), cardano (ADA, -5.8%), uniswap (UNI, -5.22%), chainlink (LINK, -5.29%), and stellar (XLM, -3.61%) are nursing declines around 10%. Bitcoin, the crypto market leader, fell 5% at $29,700.
“We’re seeing risk-off moves in equity, FX and commodities,” said Edmond G., head of trading at B2C2. “Crypto isn’t immune from traditional market sentiment and is also caught up in the legs lower. So far, we’re seeing very little movement [higher in ETH] while heading into the Ethereum Improvement Proposals (EIP) 1559 upgrade proposed [for] Aug. 4.”
Bitcoin and crypto market
The world’s fair markets encountered selling pressure on Monday. while the dollar increased on worries a rebound in coronavirus cases would derail the global economy. As a result, Bitcoin and crypto, being at the far end of the risk curve, are suffering losses.
Based on some analysts, Ethereum’s upgrade goals to burn part of the transaction fees and make ether less inflationary.
“The ether supply burn would be significant even with the growth of the layer 2 scaling solutions,” Noelle Acheson, head of markets insights at CoinDesk sister company Genesis Trading, said. ” Whatever amount ends up being burned, it will be more than what’s currently being burned, so the upgrade does reduce the supply growth.”
Ether transaction fees
Acheson mentioned that as the upgrade wouldn’t directly lessen Ether transaction fees. A sour spot for DeFi protocols and traders, it will “make them more transparent and manageable.”
Although, Delta Exchange CEO Pankaj Balani mentioned that markets priced in the bullish EIP narrative earlier this year.
Ether nearly doubled to $4,000 in the four weeks to mid-May. Even as bitcoin traded between $50,000 and $60,000. Ether’s separating was mostly powered by the optimism surrounding the EIP upgrade.
“Crypto markets are now in a slow grind lower and vulnerable to negative macro news,” Balani said . “Ether and other altcoins will see a bloodbath if bitcoin slides toward $20,000.”
In addition to it, the likelihood of bitcoin dropping that low and nuking the broader market has grew. With the cryptocurrency looking to set up a footprint below $30,000. “When a price dumps and stays flatlined at the lows, forming a ledge,” that says the market is doomed, according to trader and analyst Alex Kruger. “You can see that in most charts in the past 24 hours.”
Based on Patrick Heusser, head of trading at Crypto Finance. $29,000 and $1,700 are crucial supports for bitcoin and Ether, respectively. “How low can it go? Probably down to $20K,” he said. “If you look at the liquidity pool structure, there was not much trading on the way up, except a bit around $23,000.”
Therefore, Ether might run into a more powerful selling pressure. As blockchain data indicates an increased flow of coins onto exchanges. “We are seeing lending platforms like BlockFi sending large amounts of ETH to Coinbase, possibly to liquidate,” . Alex Svanevik, CEO of blockchain data company Nansen, said it.
Positive crypto bulls
There is a positive news for crypto bulls. As a result, that is the market is seeing low volumes while grinding lower. “It potentially signals that sellers are exhausted and that the market is waiting for some positive news,” .Heusser mentioned this.
In addition, fair markets are indicating signs of stability. The European markets are trading so much high. And the futures tied to the S&P 500 are pointing to a positive open with a 0.60% gain.“It could be a bounce time for crypto, as equity market panic looks to be over,” Kruger said. “It makes sense to move stop loses on bitcoin shorts higher to $31,000.”