Ethereum has been one of the star performers in the cryptocurrency space, rising over 40x in 2017. However yesterday a crash happened due to a snowball effect.
Indeed a ethereumowner decided to sell a huge amount of his tokens on GDAX ( a crypto exchange plateform ) and this resulted A sharp drop in the price. Ethereum decreased from 324 $ to 224 $ in a second. So when this huge sell order arrived That triggered stop loses of many traders Who puted them to protect themselves from the risks.
Many stop losses Were triggered at the same time that drove the price down even more and triggered new sellorders again and again. So this Deflationary effect is going to kill Investors confidence and therefore the value of the currency.
So if we recapitulate ethereum crash was due to :
A huge sellorder of ETH on GDAX that decrease the price from 324 to 224 $
A snowball effect that Sets off new stop losses
A crisis of confidence Which leads to a fall in demand and a price drop that lead to even less confidence in the token...
A phenomenon of Deflation by debt because many investors are selling their Ethereum because they sacred to loose a lot of money and not be abble to Repay their loans.
Here is the principal reasons so now be careful whith cryptomarket this crash illustrate the problems and risks of a no framed market !
It's time to buy and hold, not to panic and sell ! :)
The market effect of stop losses is one thing.... but I really think that trust plays a much bigger part in this.
Ethereum has its technical and architectural issues. One single DAPP brought the platform on its knees. That's something that should never have happened... how can we trust a platform in the long run when this happened so early in the game?
ETH is too young for giving any big trust in. That's why this can happen even if this seller was only one and unic personn. Better to this happens now than later. And i'm not surprise of this situation. But ETH will probably grow up again. More people will be interest in, less this kind of effect could happen. But the bubble in what ETH get in, was too huge compare to the number of actors in this crypto. We should not juge too fast. Time will speaks.
Interesting insight. Thanks & followed.
nice analysis!
J'ai essayé de faire un article (le premier) et j'ai link celui là, si jamais ça pose un problème dis le moi j’enlèverais le lien