Miners and ICO projects are killing Ethereum
|- ETH/USD is falling like a stone, down over 13% on a daily basis.
- Miners and ICO projects are selling coins to cover expenses.
Ethereum changing hands at $146.14, which is the lowest level since July 2017. The coin with the market value of $15B slipped from the second place in cryptocurrency rating amid growing bearish sentiments. ETH/USD lost 16% on Monday and may extend the decline on Tuesday unless new buyers join the market to purchase more coins while they are cheap.
Ethereum lost nearly one-third of its value in one a week, while a hash rate in Ethereum network is down to 236 TH/s, which is the lowest level since February. The current hash rate situation means that miners are suffering big losses as they have to pay for electricity, equipment, and rent amid declining profits from each mined coin. This may lead to unhappy consequences for the market as miners have to sell their coins to cover expenses.
ICO projects may also drag the price down as companies are likely to cash out the funds they raised during crowdfunding.
A report coming at the behest of Diar, a daily crypto newsletter, also found strong bearish catalysts that point to an extended selling action in the Ethereum market. The study based its bearish prediction on the possibility of the leading ICO projects liquidating their ETH holdings.
According to Larry Cermak from Diar, at current prices, some projects would become unprofitable and continue selling ETH to cover expenses.
“Obviously, a lot of the ICO companies will continue selling ETH to cover operating expenses and to fund their businesses,” Cermak said in a tweet. “It’s important to realize that the majority of these projects isn’t generating any revenue. And most likely never will,” he commented.
Ethereum's technical picture
On the intraday level, a sustainable move above $170.00 is needed to mitigate the bearish setup. However, this looks very unlikely under current market conditions as the decline is gaining traction. While little in terms of support levels under the current price, ETH/USD may easily reach $130 once $140 handle is taken out. Daily RSI stays flat in the oversold territory.
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