Ether prices have tumbled lately, after approaching $4,400 earlier this month. (Photo by Jaap … [+]
Ether prices fell sharply today, dropping to nearly $1,900, their lowest since early April, amid a broader sell-off in digital currencies.
The cryptocurrency, which is the native token of the Ethereum platform, declined to $1,902.08, according to CoinDesk data.
When it reached this level, ether was down more than 56% from the all-time high of nearly $4,400 that it reached earlier this month, additional CoinDesk figures reveal.
In spite of these recent losses, traders should remember that the digital currency has experienced some astronomical gains this year, climbing from under $750 to roughly $4,380.
[Ed note: Investing in cryptocoins or tokens is highly speculative and the market is largely unregulated. Anyone considering it should be prepared to lose their entire investment.]
Ether Retracement ‘Healthy’
Given the notable decline that ether prices have experienced lately, several analysts commented on whether the digital currency has entered a bear market.
Several of them emphatically denied that this was the case.
“This was a healthy pullback and a great buying opportunity,” said Vinny Lingham, cofounder & CEO of Civic.
Michael Conn, who is the chairman, CEO and co-chief investment officer at Zilliqa Capital, also weighed in.
He described the latest pullback as a “healthy correction” before the digital currency experiences its next upward movement.
Scott Melker, a crypto investor and analyst who is the host of The Wolf Of All Streets Podcast, offered a similar assessment, stating:
“I do not believe that Ethereum has entered a bear market, but rather that it is completing a healthy retracement before a larger move to the upside.”
A Highly Volatile Market
Melker elaborated on his views, stating that “Stock analysts often point to a drop of 20% or more from recent highs as a marker for a ‘bear market.’ This number is often invoked when an asset’s price declines.”
“What many fail to realize is that the definition of a bear market also includes a time-frame — usually longer than two months,” he noted.
“Crypto moves at the speed of light, and 20% drops are insignificant and can happen in less than a day,” said Melker.
He emphasized that when he prepared this commentary, ether had already recovered 30% from its intraday low, “and could be out of the defined ‘bear market’ in a matter of hours or days.”
Amber Ghaddar, cofounder of decentralized capital marketplace AllianceBlock, also commented on the extreme price volatility that characterizes digital currencies.
“The traditional definition of bull and bear market is inconsistent with the price action of crypto as 20% plus dips are frequent and are often part of a correction followed by a broader build-up. Throughout 2016-2017 we had 6 corrections of 30%+.”
She claimed that when it comes to defining bear and bull markets in crypto, “There is no rule of thumb as this asset class is too young and historical data is too little.”
Disclosure: I own some bitcoin, bitcoin cash, litecoin, ether and EOS.
