Another Cryptocurrency crash? What the latest cryptocurrency price means for the cryptocurrency market and its traders.
Just as many crypto traders were hoping that the worst was over, the crypto landscape has been rocked by another sharp sell-off across the asset class.
Ethereum Leading Down
The biggest mover in the crypto space was Ethereum, which plummeted nearly 20% in a 24 hour period down to $262 per unit.
While Ethereum has been touted by many as a ‘next gen’ cryptocurrency, it hasn’t been able to escape the overall downward trajectory of crypto assets in general.
This latest sell-off in Ethereum was sparked by a large number of ICO token holders cashing in their crypto holdings through the Ethereum platform.
It is believed that this on-going deflation of crypto prices associated with the Ethereum platform had a knock-on effect on the Ethereum coin itself.
And Bitcoin to Follow
Bitcoin followed its main competitor lower by 7% down to $6043.
While this drop was hardly precipitous, it does demonstrate how tightly linked the entire crypto space remains in the minds of most crypto traders.
Whereas a decline in the price of one of its main competitors could have been see as a boon for Bitcoin, instead it was seen as a further sign of weakness in crypto assets as a whole, and Bitcoin sold off alongside the rest of the major crypto assets.
The biggest result of this recent cryptocurrency price action is that the relative values of Bitcoin and Ethereum have begun to shift back in Bitcoin’s favor.
Bitcoin was seen as the main loser in this year’s decline in crypto assets, while Ethereum seemed to be weathering the overall decline slightly better.
This relative value change fed the ‘next gen’ cryptocurrency narrative that many of the fans of Ethereum like to suggest.
However, this recent move shows that the entire crypto landscape is still inextricably linked in the minds of most crypto traders, and for the foreseeable future they will continue to rise and fall together in relative tandem.
The Future Remains Cryptic
This latest shock to the crypto landscape is unlikely to change many minds on either side of the aisle.
Crypto fans have already suggested that this represents a great opportunity to double down and ‘buy the dip’ for the eventual resurgence in prices.
Many of them are prepared to ride cryptocurrency prices to the bottom, either out of a devotional belief in the potential of blockchain technology or out of a sense of seeing the process through to the end.
On the other side this latest cryptocurrency flop is just another leg down in the slow but steady deflation of all crypto assets.
The continued selling of the full range of crypto assets and the contagion effect that it has on the major cryptocurrencies is just a natural part of the deflation process.
As always the future of Bitcoin, Ethereum and other crypto assets remains obscure and contentious.
Both sides have a compelling narrative, and nothing in the latest crypto crash points definitely to one side being right and the other wrong.
In the meantime crypto traders will continue to look on, hoping for a sign one way or the other that will show them the future path of cryptocurrency prices.