Ethereum Plunges to $200 As Investor Faith Tumbles
Ethereum seems to be at a very critical point as the bearish sentiment of the market is not showing any signs of relenting in the short term.
The month of September has proven out to be quite hard on the virtual currency as it quickly lost the $300 level earlier this month, and is already threatening to continuously dive below the psychological price point of $200. This is an alarming situation for the cryptocurrency ecosystem.
"more blockchain networks are challenging the Ethereum dominance"
Mike McGlone, a commodity strategist at Bloomberg Intelligence, said that Ether could plunge further down to a support target of $155.
According to industry experts, the Ethereum crisis is being driven by elevated competition, lack of mainstream adoption and rapid conversion of funds in ether raised by ICOs. The open-source, public, blockchain-based distributed computing platform and operating system was once a very disruptive and innovative product to help developers create functional blockchain applications.
However, as the virtual currency market grows, currently with around 2000 different cryptocurrencies available for trading on around 13,800 exchanges worldwide, more blockchain networks are challenging the Ethereum dominance.
A number of promising DLT networks have come to challenge Ethereum's throne. These include EOS (having largest developer community support), Stratis, NEO (targeting large-scale enterprises), ICON, Cardano, Waves, Aeterenity, and Lisk.
In addition to the extensive competition in 2018, Ethereum has faced sell-offs as crypto start-ups paid in ETH during their ICOs cashed out to cover expenditures.
The negative portrayal, however, may be a rise of its competitors, according to Angel Versetti, CEO and co-founder of Ambrosus. She commented that Ethereum has been proven to work well as compared to other blockchains. She also said that there are more stakeholders with concentrated holdings of coins among other altcoins, who are promoting the belief that Ethereum's competitors are stronger. However, these opinions are of a speculative nature.
"Lack of mainstream adoption of dApps may also be affecting prices of ERC20 tokens as Ethereum faces a massive crisis concerning investor faith."
Bloomberg Intelligence commodity strategist Mike McGlone expects Ether to plunge down further to a support target of $155. The reasons cited for the same are increasing competition from new blockchains, a maturing industry, and market volatility.
Kyle Samani, managing partner at crypto hedge fund Multicoin Capital commented that people started building apps and software, but the market got ahead of itself. They are realizing you have to be in it for the long haul, and some investors don't have that much patience.
According to a market analyst at eToro, flaws have been found in Ethereum but there is also a lot of FUD being spread around about the doom of ether, which may be contributing to a psychological sell-off.