Bears at the Helm
The general crypto market saw a brief rally early this week. But the market has, once again, lost the steam of momentum. Ethereum, the second-ranking crypto asset has consequently dropped by 6% early Thursday.
The coin has fallen again closer to $1,800. This reveals that bears are still firmly in control of the market’s mood and direction. Therefore, this week’s increased momentum, definitely, was just a rally instigated by bears.
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The ongoing sell-off in the general market and particularly Ethereum has the potential of escalating further. The likelihood was triggered by the huge number of Ethereum tokens going into exchanges. According to Santiment, more than $2.21 billion in Ethereum have been sent into exchanges.
The on-chain data provider puts the timeline of the recent move within the past week. The development came after the long vacation of a lot of coins from exchanges. Cryptocurrencies made a mass exodus out of crypto exchanges from August 2020.
There have been swings in and out of exchanges for Ethereum all the while, irrespective. The recent movement has, however, been the most sustained back into exchanges from May 2021.
Following its strongest performance in 2021, Ethereum gradually entered a phase of correction. Although, not in isolation, the general crypto market has been on different levels of correction. The price of Ethereum is currently trading under 50% from its price at the beginning of this year.
Going deeper, Ethereum has seeded some of its dominance in the market. Before now, the token controlled 20% of the entire space, but now at less than 18%.
Institutional Investors are Dumping Ethereum and Going for Others
Reports came in from an online analytics platform, CoinShares, with new revelations. The report revealed that Ethereum has gradually fallen out of favor with institutional investors.
Following a heavy blow dealt with the market last week, institutions reset their investments. They were largely in favor of allocating more resources to other assets rather than Ethereum.
CoinShares’ report has it that the latest collapse of Terra’s UST saw investors giving more attention to Bitcoin. Up to 39% of their research respondents say Bitcoin has a more compelling growth perspective than others. Investors have raised their priority on digital tokens to 1% from 0.5%.
Investors aim to increase their reserves during the period of the dip, hence, the accumulation. The research also saw an increased allocation to ADA, XRP, and DOT above Ethereum.
While the Ethereum price action is still on, developers keep working on the coming merger. The upgrade to Ropsten testnet popularly known as the “The Merger” is scheduled to launch next week.
In other news, the Solana network paused its block production again. It becomes the ninth pause on the Solana blockchain. Validator operators on the network have been asked to get ready for a restart of operations.