ETHEREUM SLIDES AS EOS PROBLEMS ROCK THE MARKET
In early April, the ETH/USD pair started an upward trend, rising from a low of $349 to a high of $794 in early May. Since then, the pair has continued a downward trend, reaching a monthly low of $473 yesterday. The pair’s decline during this time was attributed to the Consensus summit in New York, which failed to live up to expectations.
This week’s decline is associated with the hack of a South Korean cryptocurrency exchange called Coinrail which had 30% of its virtual currencies stolen. While Coinrail is a small exchange, the hack highlighted the risks of the cryptocurrency industry as a whole.
The decline was also attributed to a Wall Street Journal story about the cryptocurrency EOS. This digital token is one of the most funded cryptocurrencies in the world with more than $10 billion in market value. During its ICO, the company received more than $4 billion – a record-breaking figure. The founders promised investors that their blockchain product would change the way the internet works. Months after the ICO ended, disagreements among the developers are putting the entire project at risk.
Ethereum is currently trading at $486, which is close to the monthly low of $473. The pair is trading below the 100-day moving average of $572 and the 200-day moving average of $640. After trading in a symmetrical triangle pattern, the pair has broken out below the support level as shown below. The pair is now trading at the oversold level, which means that there could be some gains. However, traders should be cautious because lower demand could see the pair test the two-month low of $353.