Ethereum suffered its worst daily return since September with it sliding by 19% within 24-hours.
It is now trading delicately above the $200 level of support ahead of a nervous week that could see it fall to as low as $181 and $170.
The major sell-off was reflected across the entire cryptocurrency market as Bitcoin slumped to a two-month low while the majority of altcoins endured double-digit declines.
The combined market cap of all cryptocurrencies has fallen from $264 billion to $226 billion as fear begins to creep back into the market despite a fruitful start to the year.
If Ethereum can print a bounce from the $200 region it could well test the $219 level of resistance in the coming days, although a surge in volume would be needed as a catalyst.
It’s worth noting that cryptocurrencies are incredibly volatile assets and that a move of 20% in either direction is expected from a short-term perspective.
The sharp decline in the value of cryptocurrencies has been a drop in the ocean compared to the plunge in global markets. Oil, treasury yields and stock markets have all suffered staggering losses this Monday morning.
As traders and investors continue to speculate over the impact of coronavirus, the likes of Ethereum and Bitcoin could be considered as a safe haven amidst global turmoil.
Bitcoin is often described as a form of ‘digital gold’ due to it being a common hedge against the traditional financial system.
Intriguingly, gold is at a seven-year high in spite of the recent downturn with it now trading at $1,676 per ounce.
Continuation of the slide in global stock markets could well turn investors’ attention to the more speculative cryptocurrency asset class as they attempt to diversify a portfolio of hedges.
If this theory comes into fruition Bitcoin and Ethereum could well begin to rally as the months go on, with upside price targets remaining at $13,200 for Bitcoin and $367 for Ethereum.
Ethereum was launched by Vitalik Buterin on July 30 2015. He was a researcher and programmer working on Bitcoin Magazine and he initially wrote a whitepaper in 2013 describing Ethereum.
Buterin had proposed that Bitcoin needed a scripting language. He decided to develop a new platform with a more general scripting language when he couldn’t get buy-in to his proposal.
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