Ethereum Falls by 20% as Bitcoin Taps $10,000, Is There Hope for ETH?

Ouch, Ethereum (ETH) isn’t looking too hot. In the past 24 hours, the cryptocurrency has lost 20%, while Bitcoin (BTC) has shed a relatively mere 10% in the same time frame.

According to Three Arrows Capital’s Su Zhu, Monday’s performance was the “top single-day downward move” for Ethereum since January 1st of 2017 — youch.

As of the time of writing this, ETH is changing hands for $220 — a level not seen since June. Against Bitcoin, ETH has fallen to 0.022 — the lowest this pair has traded at in over two years, back when Ethereum was but a fledgling smart contract platform with not as many applications as it has now.

Related Reading: After Flash-Crashing to $191, Analysts Expect Ethereum to Continue Dropping

This dramatic underperformance may be for good reason. Zhu points out that over 15,000 ETH was market sold on Bitstamp earlier today due to the liquidation of a decentralized loan liquidation.

View image on TwitterView image on Twitter

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Largest $ETH liquidations ever on #DeFi in thin markets --led by 15k ETH market sell on Bitstamp sending spot to $195.

Auto-liquidation w/ no-KYC vs margin call w/ KYC -- some may start to re-evaluate Peer-to-Contract vs Peer-to-Broker.


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9:45 AM - Jul 15, 2019



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This led to a dramatic selloff from $260 to $190 per Ethereum on certain platforms. The crypto market is presumably still reeling from that sharp collapse.

Also, some on Twitter have suggested that Vitalik Buterin’s suggestion to move some of Ethereum’s processes onto the Bitcoin Cash chain resulted in a selloff.

You see, by making such a proposal, the Russian-Canadian wunderkind is de-facto admitting that his blockchain is not scalable in the short term

So is there hope for ETH bulls? Yes, there might just be.

Corporate Adoption of Ethereum

Firstly, you’ve seen monumental levels of corporate adoption of the cryptocurrency.

Just recently, Samsung released a beta version of an Ethereum blockchain-focused software development kit (SDK) for developers. This will allow developers that are partnered with the South Korean technology giant to build decentralized applications built for Samsung devices. The Galaxy S10 lineup currently supports the storage of ETH.

Also, JP Morgan has continued to make use of its JPM Coin, which is reported to be based on the Ethereum-esque Quorum chain.

CME Futures Market

As corporations have adopted Ethereum seemingly en-masse, reports have begun to reveal that the cryptocurrency may soon get its own U.S.-regulated, institutionally-faced futures market.

Per previous reports from NewsBTC, trade publication The Block wrote that the CME may soon be launching an Ethereum trading vehicle.

The Block’s Frank “Fintech Frank” Chaparro suggests that the CME altering its reference rate and index for Ethereum could mean that futures are coming. An industry source told the outlet that this change is being done to “prep for an Ether” vehicle.

Related Reading: Crypto Markets Crash $35 Billion as Bitcoin Revisits Double Digits

You see, according to the individual in question, cash-settled futures like the CME’s cryptocurrency contracts can be manipulated, requiring a robust index to mitigate such risk. This recent alteration may be taking place to convince regulators to approve of Ethereum-related products.

Plus, an unnamed CFTC official that spoke to CoinDesk earlier this year claimed that those at the governmental organization are amicable towards Ethereum.

Ethereum 2.0, Serenity, On the Horizon

This all comes as the Serenity (Ethereum 2.0) upgrade is on the horizon. Just weeks ago, Justin Drake revealed that the first specification freeze for Phase Zero of Serenity occurred, which could indicate that the tentative January 3rd, 2020 date for the start of the shift to Serenity is on track.

A brief aside, Ethereum creator and Canadian wunderkind Vitalik Buterin describes Serenity as  “a way to bring technical improvements, like PoS and sharding, together to improve the Virtual Machine, Merkle Trees, the efficiency of the protocol, and a whole bunch of small technical things that you have never heard of.”

Per Buterin, all this is being done in a bid to create a “next-generation blockchain” that will be hundreds of times faster and scalable than Ethereum’s current iteration.

What’s more, Drake, a researcher at the Ethereum Foundation, explained that the inflation rate of ETH may be reduced by upwards of 90% by March 2021:

“Here’s a possible timeline (dates likely totally wrong!) highlighting the key milestones: January 2020: beacon chain launch… March 2021: eth1 fork #2 to reduce issuance by 10x.”

According to a Twitter user going by “Token State”, this reduction will reduce Ethereum’s inflation to 0.5%, which is, by many standards, extremely low and even negligible.

This is so low that from a standpoint of pure percentages, less Ethereum will be issued than Bitcoin, even after 2020’s auspicious halving event. In other words, as long as demand for ETH is maintained or even grows, the planned upgrade should be crazy bullish for the asset’s price.

Do or Die for ETH

While the news cycle is bullish for Ethereum, the charts don’t look all too pretty. In fact, many have quipped that if the cryptocurrency drops a tad further, it’s curtains closed for the asset.

As Hornhairs points out, if ETH manages to close under the green zone, it may be doomed to “die”. But, seeing that there are some potentially positive news events, ETH bulls need not feel hopeless.

View image on TwitterView image on Twitter

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$ETH 2M chart - bounce or die zone

I think we close this candle above 0.024, let's come back to this in September


21

11:09 AM - Jul 15, 2019


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