Cryptocurrencies have a generally volatile nature as such minor fluctuations in the price are considered normal. However, Ether (ETH), the native currency of the Ethereum blockchain network, is raising some eyebrows because of the recent significant drop in its price.
Following a spectacular run that made it set a new all-time high of a whopping $4,860 just last month, its price has since plummeted. While many people are only noticing the erratic behavior of the digital coin, market analyst Krugman remarked that the Ether market has been turbulent since May.
He pointed out several indicators that show the price of Ethereum has been in a bear market for seven months. According to him, this is because the current price is essentially the same as its May high of $4,168.
On the other hand, the market specialist’s claims can be disputed as the crypto market has gone through its ups and downs as a whole this year. On top of that, the price of Ether has grown by 462% this year to date.
In fact, during the past six months, the currency’s price has been up 65.8%, having soared significantly thanks to the London Hardfork Upgrade that introduced coin burning and brought the network closer to migrating to proof-of-stake.
Additionally, the entire Ethereum ecosystem has been expanding as the network remains the go-to option for major activities and projects in the top sectors of the blockchain industry, DeFi and NFT.
As it stands, the smart contracts platform is still the most significant enabler of these two highly promising sectors; therefore effectively increasing its lead over competitors and even the so-called “Ethereum killers.”
At the same time, Krugman also shared that the price of Ether is now poised for a leg up. He said, “$ETH has been in a bear market for seven months, at essentially the same price it was in May. The recent OI and funding rate puke was the final capitulation of this bear market and is prepped for the next leg up.”
The expert came to this conclusion because of the recent drop in open interest (OI) and funding rate for Ethereum. Data from Coinglass shows that the total aggregate open interest on Ethereum futures stands at approximately $10 billion currently.
But of course, much like any other venture, Ethereum also faces some challenges. There have been complaints about the Ethereum network. Among those are high gas fees and slow transactions due to network congestion. So to address these pain points, the Ethereum network has created plans and solutions to solve these problems by bringing more scalability in the future.
Even though the current trend across the entire crypto-market since Bitcoin and Ethereum reached new highs last month can be considered bearish, it cannot be said with complete certainty that Ethereum’s bear market started seven months ago.
Nevertheless, the price of Ether holds a lot of potential for the upcoming year. This is to be expected as the institutional adoption continues to grow, along with investor enthusiasm.