Today, the price of Ethereum took a dive. We all know that cryptocurrencies can be very volatile but an intraday high of $370 and intraday low of $258 is really volatile. A 30 percent top to bottom is not for the faint of the heart type of investor.
It is fair to say that this is another Ethereum price mini-crash, similar to the one of May 25th. Interestingly, back then we were really convinced that it was a temporary blip, and that prices would recover very fast, which they did. Right now, we are less confident, in all honesty.
We are not necessarily saying that the price of Ethereum will crash and not recover. What we are saying is that this correction in the price of Ethereum could last longer because of the underlying driver.
What we believe is the driver of today’s mini-crash is loss of confidence in Bitcoin (scenario 1). The other scenario that is playing out is just a normal correction, some profit taking so to speak, which results in a resumption of the rise anytime soon (scenario 2).
Assume it is a loss of confidence in Bitcoin that is driving this (scenario 1 outlined above), then we see all cryptocurrencies correcting for a longer time, Ethereum recovering very fast but Bitcoin not. That is because the whole world starts seeing that Ethereum is more powerful as a cryptocurrency but also technically and performance wise.
We will soon find out in which scenario we are. We are very curious to see if this dip was temporary in nature, in which case prices should be higher in a week from now, which is scenario 2. If that’s not the case it could take several months until we see $400 in Ethereum again.
Investors should stay focused on the long term as we remain firm on our long term Ethereum price forecast of $1000.