Ethereum Remains The ‘Basket Case’ This Bull Cycle, Will ETH Price Dip Further?

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As a seasoned crypto investor with a few battle scars from past market cycles, I’ve learned to keep a close eye on reports that could potentially impact the prices of my holdings. The recent 10x Research report suggesting Ethereum as the “basket case” in this bull run has raised some red flags for me.

As a researcher studying the cryptocurrency market, I’ve observed that Ethereum (ETH) continues to hold significant influence. However, it encounters increasing hurdles on its path to broader acceptance. A noteworthy report from 10x Research has labeled Ethereum as the “basket case” during this bull run, which adds to the apprehension surrounding its price trend. Recently, ETH lost grip of a critical support level, leaving uncertainty about its future direction.

Will Ethereum Price Continue To Dip?

As a crypto investor, I’ve closely followed the 10x Research report, which highlighted Ethereum’s significant role in supporting decentralized applications (DApps) and the Non-Fungible Token (NFT) market. However, the report also raised valid concerns about Ethereum’s weak fundamentals. These issues not only negatively impact Ethereum’s growth trajectory but also influence Bitcoin‘s price movement due to their strong correlation. Moreover, the poor fundamentals cast a dark shadow over the entire Ethereum ecosystem.

In my research, Ethereum was once hailed as a game-changer, set to disrupt traditional financial systems. However, its inability to promptly tackle scalability concerns and adapt to market shifts has resulted in it falling behind. On the other hand, Bitcoin has emerged as the digital equivalent of gold, surpassing Ethereum’s progress.

As of now, the relationship between Bitcoin and Ethereum is remarkably strong, as indicated by an R-square value of 95%. This finding underlines the close connection between these two leading cryptocurrencies. Consequently, Ethereum’s challenges are acting as a significant “obstacle” for Bitcoin, restricting broader fiat currency investments into the crypto marketplace.

The scant inflow of funds into Ethereum is another factor contributing to its more severe price drop compared to Bitcoin. Moreover, FTX has been selling off large quantities of Ethereum to fulfill margin calls. Additionally, thieves have exploited Tornado Cash to launder stolen ETH, further flooding the market with the cryptocurrency.

Experts issue a cautionary note about Ethereum’s potential for further decrease, as its price falling below $3,132.80 indicates a developing downtrend. This significant support level break hints at a continuation of the bearish market condition, with the upcoming downside aiming toward $2,905.30.

If Ethereum surpasses $3,132.80 in its price, there’s a good chance that the bearish trend will come to an end. At present, Ethereum is priced at $3,078.99, which represents a 3.10% decrease on May 6, Tuesday. Additionally, the second largest cryptocurrency by market cap touched a low of $3,027.59 during this decline.

FTX & Crypto Hackers Dump ETH

FTX, the crypto exchange led by Sam Bankman-Fried that recently filed for bankruptcy, has stepped up its liquidation process in the past few days. The company has disposed of approximately $12 million in Ethereum since the beginning of this week. Two significant transactions, as reported by PeckShield Alert, a blockchain monitoring tool, involved the transfer of $6.3 million and $6.17 million worth of ETH respectively.

As an analyst, I’ve identified that the recent sell-off of Ethereum (ETH) specifically targeted Coinbase and Wintermute. Simultaneously, criminals who pilfered Ethereum funds have employed Tornado Cash for masked transactions, eventually cashing out their ill-gotten gains. A noteworthy instance was reported by X Peak Shield Alert where hackers responsible for the $125 million breach at Poloniex transferred 200 ETH to Tornado Cash.

The Kronos Research hackers, responsible for stealing $26 million in crypto funds, have now gotten involved. They further moved 200 ETH to Tornado Cash and began launderning $4 million in Ethereum through a newly created wallet using the same service.

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2024-05-07 11:00