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On August 2 the price on Ethereum hit an all-time high of $420. Despite the rapid ETH price fluctuations investors are still very optimistic about its future.
The world of cryptocurrencies has been quite stagnated for quite some time now. The big names in the market – Bitcoin, Ethereum, and others – had been registering alarmingly low marks for several months. However, cryptocurrency analysts had been expecting the market to become bullish and the signs of this have begun to show now. What’s more interesting is that it isn’t just Bitcoin that has started rising in the market now. Other cryptocurrencies like Ethereum and Litecoin have begun registering daily highs as well. Plus, looking at historical data, these big names have almost always gone up in their prices hand in hand.
The prices of cryptocurrencies had been severely affected recently owing to the COVID-19 pandemic. As much as cryptocurrencies have been considered to be immune to such market indicators, it got affected and dipped to low levels nevertheless. Ever since, the big cryptocurrencies like Ethereum, Bitcoin, and others have been trying to pull themselves up. This raised concerns about the stability of them. Plus, this has also caused investors, even traditional ones, to turn to assisted trading tools to help them stay one step ahead of the game and protect themselves from any volatile price movements. This becomes increasingly important owing to Ethereum’s recent price hike and the subsequent sudden dip.
In 15 Minutes, Ethereum Registered a 30% Price Hike Followed by a Rapid Dip
As of August 2, Ethereum registered a 30% price move with its price hitting the $418 mark. While this was a significantly positive thing to happen to cryptocurrencies in a long while, the upsurge was only limited because within the next 5 minutes, the price for Ethereum dropped down to $302. This is about a 27% price drop in the matter of just 5 minutes. However, the volatility of this cryptocurrency doesn’t stop here. In the next 10 minutes itself, the price of Ethereum again rose to the mark of $385. These rapid shifts in its price has gotten the cryptocurrency market buzzing with excitement and waiting for another upsurge in its price.
Two significant factors contribute to this volatile shift. The price movements of cryptocurrencies are usually heavily influenced by historical data. When it comes to Ethereum, every entry in the historical data shows that the price range between $410 and $420 has always shown a resistance. Every time the price of ETH hits this mark, this price drops significantly low within a short period. Since historical data has provided evidence regarding this volatility, it doesn’t come as a surprise that the price fluctuations on August 2 were so volatile.
Another reason for this price volatility comes from liquidations in the cryptocurrency market. It is a given that whenever prices hit an all-time high or undergo a sudden rapid dip, investors look to sell-off their digital assets and make a profit out of whatever is left. This is a natural thing to consider in order to prevent any heavy future losses. This is the same thing that happened on August 2 when the prices underwent sudden volatility. Investors began to sell-off their Ethereum quickly and this rapid liquidation led to a cascading effect where almost everyone began to do the same. In order to adjust to this liquidation, the price of Ethereum shot up from $302 to $385 again in the matter of 10 minutes. This is a trend that isn’t just seen in ETH but also in other big cryptocurrencies including Bitcoin, Litecoin, and others.
Investors are Still Optimistic about the Cryptocurrency’s Future Trajectory
When the price of Ethereum hit an all-time high of $420 on August 2, the market saw rapid liquidations amounting to about $1 billion Ethereum and Bitcoin futures contract. The last such high-scale liquidation event took place when the price of Bitcoin dipped below $3,600 this year on March 13. Clearly, whenever these cryptocurrencies hit a high mark, investors increasingly look towards a big sell-off rather than holding onto the asset and looking towards another high peak. These trends were also registered in Gold and Silver last week. This also indicates that the trends witnessed in the cryptocurrency space might not be so different from traditional market exchanges after all.
Despite the rapid price fluctuations in Ethereum on August 2, cryptocurrency investors are still very optimistic about the future trajectory of this digital asset. By the end of August, we are also expected to see the launch of ETH 2.0 phase 0. This could be another reason why cryptocurrency investors are still enthusiastic about the future in this market. Moreover, among the recent price movements of Bitcoin, Ethereum, and Litecoin, Ethereum has become the most stable. Even with the volatility shown by this cryptocurrency, the price charts are still looking good and market analysts are expecting things to only go upwards from here.