Ethereum’s price fell by 4% on Monday as the cryptocurrency failed to hold the $1,600 support, currently trading at $1,500. While ETH’s price declined by several percent over the past day, its trading volume saw an increase of over 15% in the past 24 hours, suggesting plenty of market momentum behind ETHUSD.
Global Crypto Market Correction Continues
With the recent correction of crypto, the global cryptocurrency market cap is again dangerously close to dipping below the $1 trillion mark, currently at $1.007T.
If the global cryptocurrency market cap dips below the technical and emotional $1T level, we’re likely to see a further drop of 5-10% in most crypto assets. At the same time, we will see an increase in trading volume as traders waiting on the sidelines take advantage of the dip to either purchase more digital assets or consolidate some gains made over the past several weeks.
Ethereum Leading Crypto Markets
As the second-most-valued cryptocurrency, Ethereum still manages to lead the global crypto market, including Bitcoin. With the “merge trade” exciting investors for Ethereum’s upcoming network switch from a proof-of-work to a proof-of-stake consensus model, the merge could be ETH’s chance to overtake Bitcoin.
While it’s still far too early to tell whether Ethereum will be able to rise above Bitcoin’s market cap, the first step would be for ETH to conquer the 50% mark and trade at half of Bitcoin’s valuation.
Ethereum is valued at $184 billion, compared to Bitcoin’s $417 billion valuation. For ETH to reach a $208 billion market cap and trade at half of Bitcoin’s valuation, the cryptocurrency needs to reach $1,700. The best chance for Ethereum to gain 13% over BTC is with slow and steady gains throughout the week. A surge in Ethereum’s price will mean a rise in BTC and vice versa.
Regardless of if ETH’s dominance increases, the upcoming network merge spells bullish momentum for several Ethereum-based projects, especially Ethereum Classic, which managed to outperform Ethereum with last week’s price growth. Regarding the past 7-day change, Ethereum is up 3%, while Ethereum Classic is up over 10%.
One reason for Ethereum Classic’s growth is that it would be able to accommodate proof-of-work Ethereum miners since the two networks are similar. While PoW miners will have to find a new chain to mine, a substantial number of miners could switch to ETC after the network merge in September. More miners mean an increase in hash power, which means an inherent increase in the value of the underlying network.
Ethereum is likely to hold the current support of $1,500 as long as the global cryptocurrency market cap remains above $1 trillion. However, with news of the Fed looking to increase interest rates, a stock market selloff could cascade into crypto markets and cause additional bearish momentum resulting in another correction for Bitcoin, Ethereum, and other digital assets.
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any stocks.
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