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Crypto purge goes on as Ethereum smashed 38% to 18-month low

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Once the second largest crypto-currency in the world, with a market capitalization of more than $US130 billion, Ethereum has died a slow and painful death this year.

Changing Ethereum’s ticker from “ETH” to “DETH” would not seem too inappropriate right now.

The general crypto market purge which started last Wednesday has seen more than $70 billion leave the space in less than a week. Markets have plunged more than 30% in seven days as a huge sell-off drops the prices of many digital currencies back to levels unseen for well over a year.

Bitcoin initiated the digital avalanche when it broke through a crucial psychological barrier at $6,000 last Wednesday. Automated stop losses were triggered on trading platforms across the globe and a massive dump ensued with it falling 13% in a matter of hours.

The pain did not end there, as another fall was coming and all other crypto-currencies were going down with it.

Ethereum has suffered particularly badly during this digital rout, sliding 16% in the initial purge last week and a further 25% since then. In total, Ethereum has lost over 38% in seven days, an unprecedented slide from what was once dubbed “the future of global computing.

On Monday, the US Securities and Exchange Commission (SEC) ruled that two initial coin offerings (ICOs) CarrierEQ Inc and Paragon Coin Inc were in fact securities and, according to TechCrunch, the regulator fined both companies US$250,000 each.

The ruling has sent a wave of panic across the ICO industry as further crackdowns are expected. Since most ICOs raised their funding in Ethereum, there has been fear of a major sell-off, which appears to have already started and is now accelerating.

Following the news, Ethereum plunged from its already low level of about $175 to a new depth for the year of below $130. This marks the lowest point for Ether since before its initial rally in May 2017, making the current price an 18-month low and a 90% nosedive from its all-time high in January, when ETH was trading at more than $1,400.

Ethereum still has hundreds of decentralized applications running on its network, so it has good reason weather this storm. Ether’s pain has been XRP’s gain though, as the Ripple token has now climbed above it into second place in terms of market capitalization.

A week ago Bitcoin was trading at more than $6,300 and the crash, that has seen its market capitalisation fall below $90 million for the first time in over a year, has been attributed to a battle for control of a smaller hybrid crypto called Bitcoin Cash after the currency “hard forked” – or split into two – leaving uncertainty over who now owns and controls it.

Whatever the reason or reasons behind the crash, what is certain is that Tuesday has brought the lowest day for the crypto-currency market this year. A number of analysts are predicting further falls for Bitcoin, which keeps hitting new lows.

The value of Bitcoin slipped Monday below $5,000 for the first time since October 2017 and on Tuesday was trading close to $4,500. Some are saying it now may struggle to find support at $4,000 or even $3,000, although what happens next is far from certain.

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Crypto purge goes on as Ethereum smashed 38% to 18-month low
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