Ethereum (ETH) Bulls Falling Short, but will prices Drop to $200?

Ethereum-ETH

Ethereum (ETH) Bulls Falling Short, but will prices Drop to $200?

Ethereum (ETH) is peaking and traders, it seems are quickly taking their profits.

For perspective, and to quantify how fast longs are scrambling for the exits, the second most valuable asset is down 5% in the last trading day.

Ethereum (ETH) bulls Falling Short

Peaking over the weekend, $20 just shy of the important $300 level, the exhaustion of bulls is clear. Given, the coin’s rally has been spectacular.

Ethereum ETH Market Perfomance
Ethereum ETH Market Performance

In just under two months, the asset’s price rallied from Dec 2019 lows more than doubling to $280. In that impressive rally, ETH gained 140% against the greenback.

While prices soared, the burgeoning DeFi ecosystem, a sub-sector that has seen over $1 billion of ETH locked up, continues to grow.

The idea of open finance, of lending and borrowing funds without intermediation is an attractive proposition it seems.

More users are flocking to the industry. Meanwhile, the concept of flash loans is attracting diverging opinion following the loss of $350k by BzX, a DeFi protocol from where Fulcrum is built.

The BzX exploit and the $350,000 Arbitrage Money

Over the weekend, a skilled coder took advantage of the flash loan feature, borrowing 10,000 ETHs and through arbitrage, earned a cool $350k in a matter of seconds.

A flash loan is only valid within 15 seconds. That is the time it takes for an Ethereum block to be confirmed.

By coding different actions in a smart contract, the “heist” took BzX by surprise, forcing the firm to issue a statement and pause Fulcrum. The exploited contract was also paused.

The DeFi community should nonetheless be concerned. It could spur more of this of attack more so if the number of oracles is limited and decentralized.

It should be a learning curve for BzX and others. For now, the focus is on mitigation and whether prices will slump after such a near perpendicular rally.

ETH back to $200?

Ethereum ETH Daily chart for Feb 17
Ethereum ETH Daily chart for Feb 17

From the daily chart, sellers are in charge. As bears press lower, there are pockets of support.

However, that may be quashed if prices fall below the middle BB. That would trigger a wave of dumping that could force ETH back to $200, a round number.

 

Summary
Ethereum (ETH) Bulls Falling Short, but will prices Drop to $200?
Article Name
Ethereum (ETH) Bulls Falling Short, but will prices Drop to $200?
Description
Ethereum (ETH) is peaking and traders, it seems are quickly taking their profits. Prices could slide further in days ahead, just hours after a DeFi protocol was exploited.
Author
Publisher Name
CoinGape
Publisher Logo
Coingape is committed to following the highest standards of journalism, and therefore, it abides by a strict editorial policy. While CoinGape takes all the measures to ensure that the facts presented in its news articles are accurate.
Disclaimer The views, opinions, positions or strategies expressed by the authors and those providing comments are theirs alone, and do not necessarily reflect the views, opinions, positions or strategies of CoinGape. Do your market research before investing in cryptocurrencies. The author or publication does not hold any responsibility for your personal financial loss.
Author: Dalmas Ngetich

Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich

Post your comment...
Dalmas Ngetich 238 Articles

Dalmas is a very active cryptocurrency content creator and highly regarded technical analyst. He’s passionate about blockchain technology and the futuristic potential of cryptocurrencies and enjoys the opportunity to help educate bitcoin enthusiasts through his writing insights and coin price chart analysis. Follow him at @dalmas_ngetich

Follow Dalmas @