The second largest cryptocurrency by market capitalization, Ethereum may have some hitches to its performance. One of it is that it was rejected again at the 200 EMA, this indicates that investors’ value for the crypto will drop. The 200-day exponential moving average was to gauge the performance trend of the major cryptos.
Last month the first analysis was conducted. At the time Ethereum was struggling below $170, the price actually went up to $188.63 but was later reversed. The study showed that Ethereum would boost its performance within the period before the second 200 EMA.
Crypto investors and researchers took the second trend review of the top performing cryptos like bitcoin, Ethereum and others to determine hitches in price. But the technical trend indicates that there is a slow down in the market.
Factors Affecting Ethereum Performance
Ethereum has not been able to break out entirely from the bearish market. Its price has been dangling between $100 and $180. At the time of writing, it is trading at $170 at a market capitalization of $18 billion and currently down by -2%.
A decrease in Mining Profitability
The nature of mining has changed over time. Miners now adopt trends, application of GPUs designed for mining crypto enables everybody to go into mining of ETH. The more the number of miners, the lower the profitability rate. This indicates that miners will not want to sell their coin immediately, waiting for an increase in price.
Presently the hash rate is increasing every day which as well creates an increase in mining difficulties. Obviously, the situation shows that the miners will not be able to meet the current demand of investors. It is possible that some of them will not want to sell their coin, waiting for the time prices will rise.
Unfavorable Government Regulations
China has the highest concentration of mining farms. Its government has not favored the crypto industry, there have been regulations against crypto activities. This causes a decline in investment, with most investors pulling out.
Besides environmental issues challenging Ethereum, its network operations have been experiencing some many issues. But there is still hope for the top altcoin.