Ethereum price struggles despite positive data from derivatives markets
Yesterday's onslaught has caused ETH's monthly losses to climb up to around 12%.
- Ethereum has continued to stay in the AUD$4,000 to $4,800 price bracket for over a fortnight now.
- As a result of yesterday's liquidations, the total market capitalisation of the crypto industry has dipped to US$1.91 trillion (AUD$2.63 trillion approximately).
- Over 73% of all NFTs available in circulation today have only witnessed 1 transaction over the last 3 months, report suggests.
Ethereum, the world's second-largest cryptocurrency by total market capitalisation, has been on the receiving end of a lot of bearish pressure over the last 36 hours and is currently trading for AUD$3,940. As a result, ETH's weekly losses now stand at just over 16%.
That said, even though Ethereum seems to be stuck in a rut pricewise – having struggled to cleanly break past the AUD$4,800 threshold – as per derivatives data available online, it appears as though pro traders are quite bullish about the altcoin's future.
In terms of what's causing this ongoing meltdown – which is not only affecting the crypto market but also a number of traditional industries – many experts believe that the defaulting of Evergrande, a major Chinese real estate company, on its loans worth US$300 billion along with looming fears of inflation may have resulted in the creation of a "fear based" trading environment.
Additionally, a few days back, United States Treasury Secretary Janet Yellen penned an op-ed where she called for members of the United States Congress to raise America's debt ceiling once again, claiming that if such a move is not made, it could result in a "widespread economic catastrophe." Finally, over the next few hours, the Federal Reserve is expected to make a decision as to when it plans to pull back on its existing US$120 billion monthly asset purchase program.
Is the NFT market dead?
Even though the non-fungible token (NFTs) market has continued to dominate headlines across the globe all through the year – thanks in large part to the success of projects such as CryptoPunks, Bored Ape Yacht Club and Art Blocks Curated – a closer look at the space shows that despite some million-dollar sales for select NFTs, an overwhelmingly vast majority of the lower-priced NFTs have not been able to accrue any sort of real value, making them completely illiquid.
As per data made available by Bloomberg, a staggering 73.1% of all NFT assets available in circulation have only seen 1 transaction over the last 3 months. If that wasn't enough, even the number of daily NFT sales have continued to dip over the last couple of months – with figures dropping from an all-time high of 138,109 on 30 August to just 42,372 on 21 September.
Lastly, other notable metrics related to the NFT space – including active market wallets, primary market sales, secondary market sales, etc – have also shown no signs of growing, leading many to believe that the hype surrounding this market may finally be dying down.
Another DeFi platform falls victim to a hacking scandal
As per an official announcement, decentralised finance (DeFi) platform Vee Finance reported that it had been on the receiving end of a hacking exploit that saw miscreants make their way with 8,804 ETH and around 214 Bitcoin (estimated to be worth around US$35 million at press time). The development comes just days after the project's mainnet went live on the Avalanche network.
Disclosure: The author owns a range of cryptocurrencies at the time of writing