Ethereum’s price crashes hard in the wake of a major market wipeout
Despite AUD$350+ million being wiped out from the crypto market yesterday, Ethereum's monthly gains still stand at an impressive 15%.
- ETH's latest dip comes after Bitcoin's most recent slide, which saw the latter lose AUD$13+k (approximately) of its value.
- Reports indicate that demand for ETH mining gear is at an all-time high, with the total global GPU market supply expected to fall short by nearly 50% in the coming weeks.
- Ethereum's market dominance index has grown to an impressive 18.7% over the last couple of weeks.
After having reclaimed the all-important US$4,000 (AUD$5.5k approximately) psychological threshold just a couple of days ago, Ethereum, the second-largest cryptocurrency by total market capitalisation, proceeded to lose over 10% of its value overnight, dipping to a relative low of AUD$4,500 in just hours. That said, over the last hour or so, ETH has staged a minor comeback, with the altcoin currently trading at $4,685.
The entire episode comes after Bitcoin plunged by approximately AUD$13k following news that the El Salvadoran government – helmed by major crypto-proponent President Nayib Bukele – had formally legalised the flagship crypto as legal tender within its borders.
Additionally, it is worth noting that in spite of the aforementioned turbulence, ETH's technical financial indicators remain largely in the green zone, as is exhibited by the fact that the digital asset is exhibiting fortnightly and monthly gains of 9% and 15% respectively. In addition, the price of most popular GPUs (Graphics Processing Units) has continued to touch new all-time highs, with demand for quality ETH mining gear soaring recently.
In this regard, it should be pointed out that the price of Nvidia's GPU range has shot up by a whopping 20% (approximately) in recent months, with the company's GPU market supply likely to fall short by 50% over the coming few weeks due to rising demand. Similar scenarios have also played out for other prominent hardware manufacturers, including AMD whose RX 6000 series card is extremely popular with Ethereum miners and has seen its valuation rise substantially.
ETH Layer-2 solutions witness spike in transaction volumes
A growing number of Ethereum-based layer-two scaling solutions seem to have gained a lot of mainstream traction recently, especially with gas prices surging once again – with transaction fees even touching the US$40 mark at one point last month.
As a result, an increasing number of users have continued to transition to layer two protocols, with technical data even suggesting that more transactions were processed by different Ethereum layer twos than by the Bitcoin network earlier this week. Numbers-wise, it was found that while ETH layer-two protocols processed around 250k transactions on Monday, the BTC network processed about 210k transactions.
Disclosure: The author owns a range of cryptocurrencies at the time of writing