In this Ethereum price live session, we shall look at what is happening at the coin that has driven most of the activities in the cryptosphere and the dynamics behind the capitalization drop.

I just took a look at the Coinmarketcap chart and my eyes searched for Ethereum at the usual number 2 but the coin has dropped to number 3 with Ripple taking the second position that ETH has been known to occupy.

Disappointing Predictions

Not a few speculators thought that Ethereum found stability in mid September when like Bitcoin the coin showed low volatility after months of plumetting value. More daring speculators said that the coin may reach new highs of $500 before the end of the year but this mid December and Ethereum is trading at $85.

 The coin has lost $200 since September exhibiting price performance last seen since May 2017.

Even in September when some enthusiasts of the coin were optimistic that better days were ahead, a cursory look at the Ethereum chart showed that the expectations of such recovery was premature as seen from the H1 chart which showed that ETH was merely at price adjustment phase.

Conjectures Not Facts

In any case, there were no metrics on ground regarding the sudden optimism that the coin would rally overnight, considering it was among the worst performers for the year .

This was due to the fact that most investors were already betting against Ethereum mainly due to its extreme bearish inclination since the beginning of the year. This was not unconnected with the fact that the platform had hosted most of the initial coin offerings.

This had effectively moved a lot of funds to ether, but with confidence dwindling due to falling prices, project owners quickly pulled out their funds. This no doubt added to the woes of the coin.

In reality, what has been going on in the coin market is that most speculators tend to lean towards bullishness. They effectively tend to will their favorite coins to ride the bull even if there are no fundamental or technical factors pointing in that direction.

The case of Ethereum has not been different. In fact, the coin has proven to be a bad short-term investment even though it could be profitable long term if one invests at its low values such as we are recently witnessing.

Recovery Dependent On Market Health

Ethereum is one digital currency that needs a robust coin market to make substantial recovery since its ecosystem has found utility mainly from hosting smart contracts. These are mainly dependent on the overall confidence of the coin market.

Talking about smart contracts, the fact that most of the ICOs held from last year proved unreliable clearly added to the loss of confidence in Ethereum.  After all, it still was the primary hosting platform for the funding.

Silberman, a BCTalk contributor effectively captured the trend for Ethereum price live when he explained the reason for the drop in the value of the coin saying,

“To me the crash in the price of Ethereum has to do with the reality that no one is buying Ethereum because they do not need it anymore, no one is investing in ICOs because they are understanding that despite the quality of a project it is not going to go up in price in this market and since there is no demand to buy Ethereum the price went down.”

Smart Contract Competitors

Still on ICOs and smart contracts, Ethereum already has competitors in platforms like Cardano, Waves, Tron and EOS, and there are reasons to believe that with its dismal performance in 2018 Ethereum would have a tough time gaining as much prominence as it did last year, even with expected bullish market in 2019.

Ethereum price like that of most altcoins has mostly depended on Bitcoin trend even though it has underperformed and has not even reflected most recent market mini rallies.

Meanwhile, the Constantinople hard fork is expected on January 14, 2019. The upgrade will likely give the coin price some boost but even this will not be very significant with the low investor confidence in the coin.

Loss of Investor Confidence

Credit: Trading View

Nevertheless, it is clearly close to its short-term bottom with a support close to $70 for a coin that traded at $1,500 in January this year. Loss of value coinciding with loss of capitalization is a clear testimony of a coin that can rightly be described as having lost substantial investor goodwill despite great promise.

The lull has clearly shown, not just in falling ETH price but also in capitalization. Ripple which has overtaken Ethereum in terms of capitalization has done so again with a capitalization of $11.7 billion for Ripple’s $8.8 billion.

This may be a reflection of the dipping interest in Ethereum as a direct consequence of disenchantment with ICOs and liquidation of ether held by project owners.

Alternatives to Ethereum

These days, there are several coins that are competing with Ethereum in terms of hosting projects and speculators are looking towards them as the investment instruments and options to Ethereum.

Nevertheless, there is no doubt that in the meantime, ETH is still a good choice especially with the present low price. Unless we do not see substantial recovery in Q1 of 2019, there is no reason to believe that NEO and EOS will match Ethereum in terms of value.

Granted, the Ethereum Foundation need to ensure the network scales fast as this may be where EOS has an edge over ETH.   

In the short term, a Trading View analysis summarized the Ethereum price this way:

“Maybe even see it as a war game, where during a bear trend, the bears are in full force in an open field, not scared of anyone. The bulls are still hiding in the woods, outnumbered, sometimes peaking over the the fence to see if reinforcement have arrived yet from the other side of the war zone, so they can attack the bears from both sides and with more soldiers than the bears.” 

What is your experience investing in Ethereum? Do you think the coin will see some appreciation in value soon? Send in your comments in the comment box below.