Bitcoin, Ethereum, and the rest of the cryptocurrency market came crashing again this week, just when investors hoped for relief.
The largest cryptocurrency extended Monday’s dip to the lows of $21,000 hours ago, bringing the market capitalization to roughly $400 billion, which also represents about a 78% decrease year-over-year. Ethereum also took a severe hit, dropping to almost $1,000 with a market capitalization of $149 billion.
Analyzing Ethereum’s downtrend
Ether has lost more than 74 percent of its market value since reaching an all-time high in November, despite being atop the list of the busiest blockchain networks. A $10,000 ETH investment in November would be worth around $3,500 at today’s market price.
ETH YTD graph coinmarketcap
Besides the bearish market performance of Ethereum over the past months, some on-chain metrics are also not looking good for Ethereum at the moment. Amidst the growing level of fear in the market, inflows to exchanges have risen significantly, which usually indicates that investors are selling.
Over the last 24 hours, Ethereum investors deposited more than $2.1 billion worth of ETH to exchanges, probably to sell. Within the same period, only $1.5 billion worth of ETH was transferred off crypto exchanges, resulting in a positive net flow of $532.4 million. This somewhat indicates there is more selling pressure on ETH.
Onchain analytics platform Glassnode recently reported Ethereum’s exchange net flow (1d MA) just reached a 9-month high of 17,450.686 ETH.
Will Ether go back up?
Based on the current outlook of the general cryptocurrency market, people are speculating that crypto prices will drop lower from current levels in correlation with the traditional markets. If so, Ether could decrease further to a three-digit market value. However, going by the market history, Ethereum is likely to go back up once the bear market is overturned.
Ether recorded a 67 percent from as high as $311 back in 2019 but eventually recovered even to the current ATH. The price is more likely to rebound as demand starts increasing and net flows turn negative again. At the moment, the market sentiments are still bearish, and there’s no sign of strength in Ether.