Ether Trading Volume in a Slump

There’s been a significant drop in trading volume this week for both the ETH and ETC markets. In fact, according to cryptocompare.com, this week has been the lowest ether trading volume in 6 months. 

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ETH trading volume has dominated the #2 spot since the bull run that started back in January. There’s even been a few occasions when its volume rivalled bitcoin.

Poloniex is the ETH market mover and generally ranks top of the list for volume. Today ETH has been bumped down to third position on Poloniex with DASH taking its spot. 

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The Ethereum Drama Subsides

Initially during the battle between ETH and ETC, both coins dominated the markets for trading volume. For several weeks, each coin had an inverse correlation and took turns rallying while the other dropped. 

At the moment of writing this, each coin seems to have lost their inverse relationship as both markets sink into low volume chop. This could change if one market gains momentum again. 

The drama surrounding the hard fork dominated the news in the crypto space for weeks. Things seemed to have cooled off, making this week somewhat uneventful. Perhaps the lack of interesting news is reflected in the drop in trading volume and price. 

A Store of Value

During Ethereum’s massive 2000% bull run, the media was blazing with stories of it being the Bitcoin killer. As a trader who has seen many altcoin bubbles, I’ve been very sceptical of such claims.  

Most altcoins claim to be the next best thing and have their moments of glory but how many of them have proven to be a good long-term store of value? Although I respect diversity as another mechanism towards decentralization, altcoins tend to be driven by hype.

The crypto markets are being diluted by a constant stream of new ICOs and coins. This can weaken the altcoin ecosystem by pulling liquidity out of the markets. 

Ethereum’s bull market significantly boosted the ICO model, as traders and investors chase quick returns. Although many of these ICOs can be profitable, most of them will likely fade off. 

Thus far, bitcoin is the only time tested coin that has proven to be a good long-term store of value. Bitcoin is still the gold standard of crypto because altcoins are being constantly diluted and compete with each other for market share. 

Looking at market capitalization, Bitcoin is 80% of the value within the entire crypto ecosystem. Many professional crypto traders use altcoins as a means for increasing their bitcoin holdings. 

Ethereum is still a new experiment that’s only a year old and I shall remain sceptical until it stands the test if time. 

Quiet Before the Storm

Sometimes low volume and price stability can be the quiet before the storm. I anticipate the possibility that either ETH or ETC may break out of this slump with another price rally. 

Since ETC is still a relatively new market that’s already showed strong signs of bullishness, I anticipate its lower marketcap could have more upside potential. 

 

Rocky

Rocky is a cryptocurrency analyst, strategic consultant, educator, position trader and investor. He started his journey learning about Bitcoin in 2013, became obsessed with it and dropped everything to work full-time in the space since 2015.
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