Ethereum Price Flirts With Yearly Low as ICOs Offload 157,700 ETH
Ethereum was back on the defensive Tuesday, with prices approaching fresh yearly lows amid signs that initial coin offerings were offloading their ETH reserves.
Ethereum’s price clocked in at a low of $187.89 on Bitfinex, where it was approaching its weakest level in over a year. The second-largest cryptocurrency by market cap was last seen hovering near $189, down 4.2% from the past day. ETH/USD trade volumes amounted to 234,000 positions on Bitfinex, according to latest available data.
Ether’s technical indicators suggest a recovery is possible, though gains are likely to be minimal and short-lived. The coin is considered oversold based on the relative strength index (RSI). Price action is also deteriorating based on the 100-period moving average.
At current values, Ethereum is capitalized at $9.4 billion, according to CoinMarketCap.
Among the top-50 ERC-20 tokens by market cap, 38 had reported declines on Tuesday. All but one were down compared with last week.
The combined value of all cryptocurrencies in circulation has fallen to $193 billion.
Ether-based initial coin offerings have spent 157,700 ETH over the past seven days, an amount that is equivalent to $29.9 million at today’s prices, according to data provider Santiment. That’s the highest spend since March of this year. While “ETH spend” has multiple meanings, there are strong indications that crypto startups were offloading ether for fiat on major exchanges.
According to cryptocurrency analyst Alex Kruger, roughly 4% of the ETH held in visible ICO wallets was transferred out during the month of August. That’s equivalent to 135,000 ETH, or $900 million at the time. Kevin Rooke, another crypto analyst, showed that ETH reserves held by ICOs fell to $600 million last week.
The ICO cash-out is one of several reasons behind ether’s 40% drop over the past month. A protracted bear market, concerns over scalability and fears of “economic abstraction” have all exerted downward pressure on the ether price. Ethereum co-founder Vitalik Buterin has also struggled to buoy investor confidence by suggesting that the crypto price boom has reached its ceiling.
As Hacked recently reported, short positions on ether reached record highs on Bitfinex, an ominous sign for traders expecting a reversal anytime soon.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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