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Daily Analysis: Ethereum Shortage Sparks Downward Trend

Last Updated March 4, 2021 4:57 PM
Avner Meyrav
Last Updated March 4, 2021 4:57 PM

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Both Bitcoin and Ethereum showed slight losses yesterday. For the latter, the correction actually came from a sudden increase in demand, which bottlenecked, causing prices to drop. Overall, the cryptocurrency market displayed a downward trend yesterday, as 9 out of the top 10 registered losses.

$300 is Ethereum’s new support level

Ethreum’s price seems to have found a new support level that is higher than the all-time high seen less than two weeks ago. After showing losses for two consecutive days, Ethereum prices recovered this morning, after reaching $305. Despite showing a correction since it peaked at over $420 10 days ago, Ethereum is still showing impressive overall gains this month.

Bitcoin’s newest ally: India

The Indian government has put forth a plan to consider the applications of Bitcoin and blockchain technology in the country. The Ministry of Finance has put together a committee, which will hear from the public about the possibilities involving the cryptocurrency, and announce its findings next month. Meanwhile, Bitcoin has been trading within a relatively narrow margin of just over $300 in recent days, keeping just below $2,700 this morning.

Ethereum shortage sparks downward trend

As more new digital currencies opt for the Ethereum platform when holding their initial coin offering (ICO), the cryptocurrency seems to be having some scaling problems. Yesterday’s Status ICO, which raised more than $100 million in Ethereum, caused a demand spike that some exchanges couldn’t handle, causing Ether prices to drop 15% momentarily. Since yesterday’s trading volume for ethereum was more than $1.5 billion, this sudden drop also affected other currencies, as 9 out of the top 10 registered losses.

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