What a difference two weeks can make in cryptoland. While the Ethereum price was red hot two weeks ago, with an all-time high above 400 USD on June 13th, Ethereum is now trading around 240 USD.
In recent days the price of Ethereum corrected significantly. For regular investors this is a cataclysmic crash: 40% in two weeks is not normal. However, in the land of cryptocurrencies this is not so strange. Prices are extremely volatile, both to the upside and downside.
Now, as always, this price correction had to be attributed to something. Media are the first ones to find a “reason” when the price of an asset, in this case Ethereum, rises or falls. And they did so in the fake news that Ethereum’s founder was said to be passed away during a car crash over the weekend. Nothing was further from the truth, and is yet another proof of the misleading role that media plays in “analyzing” markets.
Our point is illustrated by this quote on QZ.com:
“This is what market manipulation looks like in the age of cryptocurrencies and fake news. The hoax did reveal something interesting about cryptocurrencies: Unlike bitcoin’s creator, Satoshi Nakamoto, an almost mythical figure whose identity remains unknown, Buterin is the de facto public face of ethereum. He doesn’t control the network—it’s a piece of decentralised software that anyone can run or build on, just like bitcoin—but his status as its creator means that rumors like this one have a higher chance of taking hold in the markets. That means that $26 billion in market value partly depends on a 23-year-old staying healthy and alive—and providing selfies to prove it.”
Or what about this article on Futurism.com:
“Ultimately, this story highlights that all cryptocurrencies are inherently volatile, at least for now. On June 21, for example, a single multi-million dollar sell order caused a “flash crash” in Ethereum, a symptom of a young and underdeveloped infrastructure. This problem will be repaired over time as the cryptocurrency market evolves, regardless of what happens (or doesn’t happen) to founders.”
Make no mistake. These articles are worthless, and smart (crypto) investors do not pay attention. Smart investors stay focused on what happens on the price charts, in the industry, and in the relevant fundamental data.
From our perspective, we want Ethereum to stay above 200 USD. A temporary dip below that price level would not be the end of the bull market, but bullish momentum can only continue as long as Ethereum trades above 200 USD.